Post on 14-Apr-2017
Suominen Corporation
Q1 2016
Nina Kopola, President & CEO
Tapio Engström, CFO
4/28/2016
Our purpose is to make nonwovens continuously better for people.
Agenda
• Highlights Q1 2016
• Strategy and its implementation
• Financial review Q1 and outlook
• Q&A
4/28/2016 2
Our purpose is to make nonwovens continuously better for people.
Q1: Demand on a lower level, signs of improvement in
sight – outlook remains unchanged
4/28/2016 3
EUR 5.5
million
EUR 9.1
million
EUR 103.9
million
14.7%EUR 0.06 28.6%
Our purpose is to make nonwovens continuously better for people.
Net sales declined by 7.2%
Net sales, EUR million Net sales, EUR million
98,4 95,3103,3104,8
111,9112,9114,9 104,2103,9
0
20
40
60
80
100
120
140
356,9373,7
401,8
444,0,0
0
100
200
300
400
500
2012 2013 2014 2015
• Net sales decreased from the comparison period to EUR 103.9 million. Demand was not at the same level as
in the comparison period. This also affected the competitive situation.
• Net sales were affected by both decreased sales volumes and lower sales prices in approximately equal
proportions.
• We saw signs of improvement in demand already towards the end of the review period.
Continuing operations. Continuing operations.
4/28/2016 4
Our purpose is to make nonwovens continuously better for people.
Proportion of sales of products with
higher added value grew
4/28/2016 5
41%
22%
15%12%
8%
38%
25%
18%
10% 8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16
Typically higher value-added products
Baby wipes Personal care wipes Household Workplace Hygiene and medical products
Our purpose is to make nonwovens continuously better for people.
6,5 % 5,8 %
5.0 %
5,9 %
6,5 %
8,8 % 8,5 %
4,1 %
5,3 %
0%
2%
4%
6%
8%
10%
0
2
4
6
8
10
Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16
EUR million %
Operating profit decreased
from the comparison period
Operating profit excl. NRI, EUR million and % Operating profit excl. NRI, EUR million and %
• Operating profit decreased by 24.0% and amounted to EUR 5.5 million.
• Lower sales volumes and decrease in gross profit affected operating profit. There was no material
effect of US dollar exchange rate fluctuation on operating profit during the first quarter.
Continuing operations.
4,2 %
5,2 %
6,7 %7,0 %
0%
1%
2%
3%
4%
5%
6%
7%
8%
0
5
10
15
20
25
30
35
2012 2013 2014 2015
EUR million %
Continuing operations.
4/28/2016 6
Our purpose is to make nonwovens continuously better for people.
Strategy2015–2017
4/28/2016 7
Our purpose is to make nonwovens continuously better for people.
Strategy 2015–2017
4/28/2016 8
Our purpose is to make nonwovens continuously better for people.
The growth investment program now focusing on
the Bethune investment
Plant Estimated
value
Installed
during
Bethuneapprox. EUR
50 millionH2/2016
Alicante
approx. EUR
4 million2015Nakkila
Paulínia
To be
confirmed
approx. EUR
6 million
4/28/2016 9
Bethune, SC,
USA
Paulínia,
Brazil
Alicante,
Spain
Nakkila,
Finland
Our purpose is to make nonwovens continuously better for people.
5,0 %
12,4 %
15,7 % 15,9 %14,7 %
0%
5%
10%
15%
20%
2012 2013 2014 2015 Q1/2016
ROI, %
6,9 %
3,5 %
0,8 %
0%
2%
4%
6%
8%
10%
12%
2013 2014 2015
Organic net sales growth, %
101 % 96,2 %
34,7 %
25,9 %
28,6 %
0
0,2
0,4
0,6
0,8
1
1,2
2012 2013 2014 2015 Q1/2016
Gearing, %
Progress on mid-term financial targets
• Net sales growth compared to
previous year.
• Target level marked with dashed
line.
• Figures are of continuing
operations.
4/28/2016 10
Our purpose is to make nonwovens continuously better for people.
Financialreview Q14/28/2016 11
Our purpose is to make nonwovens continuously better for people.
Profit for the reporting period
remained more or less unchanged
Profit for the reporting period, EUR million Profit for the reporting period, EUR million
2,62,2
0,6
4,8
3,5
6,2
5,4
1,9
3,4
0
1
2
3
4
5
6
7
-2,8
5,7
10,2
17,0
-5
0
5
10
15
20
Continuing operations. Continuing operations.
4/28/2016 12
2012 2013 2014 2015
• Profit for the reporting period was strengthened mainly by lower financial expenses.
Our purpose is to make nonwovens continuously better for people.
Statement of profit or loss
4/28/2016 13
EUR thousands 1-3/2016 1-3/2015 1-12/2015
Net sales 103,869 111,934 444,042
Cost of goods sold -92,077 -97,547 -386,042
Gross profit 11,792 14,387 58,000
Other operating income 629 950 2,637
Sales and marketing expenses -1,758 -1,902 -7,760
Research and development -837 -851 -3,527
Administration expenses -4,339 -4,681 -16,709
Other operating expenses 55 -611 -862
Operating profit 5,543 7,292 31,778
Net financial expenses -244 -1,621 -5,302
Profit before income taxes 5,299 5,671 26,476
Income taxes -1,858 -2,188 -9,456
Profit for the period 3,441 3,482 17,020
Gross profit did
not reach the level
of the comparison
period
Cost structure
continues on a
healthy level
Fluctuations in
exchange rates
decreased the
financial items
markedly below the
level of the
comparison period
Our purpose is to make nonwovens continuously better for people.
Statement of financial positions, assets
4/28/2016 14
EUR thousands 31.3.2016 31.3.2015 31.12.2015
Non-current assets
Goodwill 15,496 15,496 15,496
Intangible assets 13,411 12,598 13,275
Property, plant and equipment 94,173 92,197 97,931
Loan receivables 7,793 8,202 7,793
Available-for-sale assets 777 1,113 777
Held-to-maturity investments − 433 −
Other non-current receivables 2,442 2,518 2,402
Deferred tax assets 4,529 5,276 4,491
Total non-current assets 138,621 137,833 142,165
Current assets
Inventories 31,816 30,914 32,557
Trade receivables 52,151 60,599 51,547
Loan receivables 1,000 600 1,000
Other current receivables 5,183 4,108 7,038
Assets for current tax1,892 1,381 1,874
Cash and cash equivalents 53,065 38,036 55,570
Total current assets 145,107 135,639 149,585
Total assets 283,728 273,472 291,750
Elevated cash.
Payments in our
growth
investment
program will bring
cash level closer
to normal
Our purpose is to make nonwovens continuously better for people.
Statement of financial positions, equity and liabilities
4/28/2016 15
EUR thousands 31.3.2016 31.3.2015 31.12.2015
Share capital 11,860 11,860 11,860
Share premium account 24,681 24,681 24,681
Reserve for invested unrestricted equity 69,652 69,572 69,652
Treasury shares -44 -44 -44
Fair value and other reserves 500 14 -118
Exchange differences 1,660 8,216 5,097
Other equity -4,775 -15,901 -3,076
Total equity attributable to owners of the
parent103,534 98,398 108,052
Hybrid bond 17,272 16,653 17,664
Total equity 120,806 115,051 125,716
Liabilities
Non-current liabilities
Deferred tax liabilities 10,411 9,832 10,890
Liabilities from defined benefit plans 1,105 1,151 1,105
Other non-current liabilities 258 1,303 651
Debentures 75,000 75,000 75,000
Other non-current interest-bearing liabilities 18,058 6,667 18,498
Total non-current liabilities 104,831 93,953 106,144
Current liabilities
Current interest-bearing liabilities 3,318 3,333 3,363
Liabilities for current tax 764 941 47
Trade payables and other current liabilities 54,010 60,194 56,479
Total current liabilities 58,092 64,468 59,889
Total liabilities 162,923 158,421 166,034
Total equity and liabilities 283,728 273,472 291,750
Payment of
dividend the only
notable
transaction
Our purpose is to make nonwovens continuously better for people.
Cash flow from operations doubled
from the comparison period
Cash flow from operations, EUR million Cash flow from operation, EUR million
-0,4
11,3
16,9
9,3
4,5 3,9
7,9
11,0
9,1
-2
0
2
4
6
8
10
12
14
16
18
24,9
21,3
37,1
27,3
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015
• Cash flow from operations was mainly improved due to a decrease in paid
financial items as well as positive change in working capital
4/28/2016 16
Our purpose is to make nonwovens continuously better for people.
Statement of cash flows (1/2)
4/28/2016 17
EUR thousands 1-3/2016 1-3/2015 1-12/2015
Cash flow from operations
Profit / loss for the period 3,441 3,482 17,020
Total adjustments to profit / loss for the period 6,852 8,319 32,870
Cash flow before changes in net working capital 10,292 11,802 49,890
Change in net working capital 1,368 -107 -7,921
Financial items -1,828 -5,317 -6,425
Income taxes -714 -1,886 -8,269
Cash flow from operations 9,118 4,493 27,274
Cash flow from investments
Investments in property, plant and equipment and
intangible assets-3,849 -1,664 -22,369
Cash flow from disposed businesses − − 167
Sales proceeds from property, plant and
equipment and intangible assets− 10 10
Cash flow from investments -3,849 -1,654 -22,192
Improved cash
flow from
operations
attributable to
all components
Investments
continued
Our purpose is to make nonwovens continuously better for people.
Statement of cash flows (2/2)
4/28/2016 18
EUR thousands 1-3/2016 1-3/2015 1-12/2015
Cash flow from financing
Drawdown of other non-current interest-bearing
liabilities− − 15,000
Repayment of other non-current interest-bearing
liabilities− − -3,333
Changes in current interest-bearing liabilities − -14 -14
Changes in loan receivables − − 600
Share issue − 340 340
Paid interest on hybrid bond -624 − −
Dividend distribution / distribution of funds -5,030 -2,504 -2,504
Cash flow from financing -5,654 -2,177 10,089
Change in cash and cash equivalents -385 662 15,171
Cash and cash equivalents at the beginning of the
period55,570 38,430 38,430
Effect of changes in exchange rates -2,120 -1,056 1,968
Change in cash and cash equivalents -385 662 15,171
Cash and cash equivalents at the end of the
period53,065 38,036 55,570
Strong cash flow
covered both the
investments and
the payment of
dividend
Our purpose is to make nonwovens continuously better for people.
Outlook for 2016 remains unchanged
• Suominen expects that for the full year 2016, its net sales
and operating profit excluding non-recurring items will
improve from year 2015.
• In 2015, Suominen’s net sales amounted to EUR 444.0
million and operating profit excluding non-recurring items
to EUR 31.2 million.
4/28/2016 19
Our purpose is to make nonwovens continuously better for people.
Summary Q1 2016
4/28/2016 20
EUR 5.5
million
EUR 9.1
million
EUR 103.9
million
14.7%EUR 0.06 28.6%
Thank you!
4/28/2016 21
Appendix
Our purpose is to make nonwovens continuously better for people.
Reverse share split
• Suominen carried out a reverse share split with a 5:1 ratio.
• The target for the reverse split was to make the share more
attractive to investors, to enhance share trading conditions
and to add flexibility in defining the amount of dividend.
• The arrangement was subject to the resolution of the Annual
General Meeting.
• Before the reverse share split, Suominen Corporation had in
total 252,425,616 shares. After the reverse share split, the total
number of shares in Suominen Corporation is 51,216,232.
4/28/2016 23