SuominenInterim Review January–March, 2020

April 23, 2020Petri Helsky, President and CEOToni Tamminen, CFO

Agenda

• Q1/2020 in brief• COVID-19 update• Financial review Q1/2020• Progress in strategy• Outlook 2020• Q&A

April 23, 2020

Q1/2020 in brief

• Operating profit nearly doubled to EUR 5.7 million (3.0)• Net sales remained at the same level as in the comparison period and were EUR

110.2 million (109.8)• Cash flow from operations improved to EUR 9.4 million (-2.4)

• Multi-year commercial cooperation agreement with Ahlstrom-Munksjö regarding flushable products from Ställdalen plant in Sweden (April 6, 2020)

• Investment to enhance one of our production lines in Italy (April 16, 2020)

• Outlook for 2020 updated

April 23, 2020

- Net sales remained at the same level as in the comparison period as raw material-led sales price decline was compensated by highervolumes

- Share of new products was in excess of 25% of net sales- The positive impact from currencies on net sales was EUR 1.4 million

April 23, 2020

Net sales

Net sales, EUR million Net sales, EUR million

106,6110,0

104,8 109,8 109,8 103,8 103,4 94,5110,2

0

20

40

60

80

100

120

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20

444,0416,9 426,0 431,1 411,4

110,2

050

100150200250300350400450500

2015 2016 2017 2018 2019 Q1/2020

- Operating profit nearly doubled to EUR 5.7 million (3.0), mainly due to higher sales volumes, improved production efficiency, betterraw material efficiency, and favorable raw material prices. Currencies had a negative impact of EUR 0.6 million.

- The growth investment project concluded last year at our plant in Green Bay, WI, USA, was one of the factors enabling higheroutput

April 23, 2020

1,52,9

0,5 -0,4

3,0 2,7

1,1 1,4

5,7

-1%

0%

1%

2%

3%

4%

5%

6%

-2

0

2

4

6

8

10

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20

EUR million %

Operating profit nearly doubled

Operating profit Operating profit

31,2

25,6

15,0

4,68,1

5,70%1%2%3%4%5%6%7%8%

0

5

10

15

20

25

30

35

2015 2016 2017 2018 2019 Q1/2020

EUR million %

COVID-19 update

• The COVID-19 pandemic increased volumes in all our markets towards the end of the quarter and in the short term the higher demand is expected to continue

• However, in the second half of the year this COVID-19 caused demand surge may already have calmed down

• In the longer term the COVID-19 pandemic may lead to continued increased demand for nonwovens for cleaning and disinfection applications

• Helped by our proactive mitigation measures regarding e.g. raw material sourcing and strict safety procedures at our plants, so far we have been able to run our operations with limited impacts

• The main risks posed by the pandemic for Suominen are possible shortages of raw materials, potential closures of customers’ or our own plants due to virus infections or authority decisions, and issues linked to logistics

April 23, 2020

Suominen is taking part in fighting the COVID-19 pandemic

• Suominen has been developing materials for various healthcare needs, incl. face masks and protective clothing

• Suominen’s nonwovens for the manufacturing of face masks have already passed tests in a third party laboratory

• Our material has passed the requirements for EN 14683:2019-Type II device in terms of filtration efficiency and pressure drop. Type II surgical mask is used by e.g. healthcare professionals

• Suominen is investing in upgrading one of its existing production lines in Nakkila in Finland to enable the production of these materials in large scale and production will start in the near future

April 23, 2020

Financial review Q1/2020

April 23, 2020

Consolidated statement of profit or loss

April 23, 2020

EUR thousand 1-3/2020Restated 1-3/2019

Restated1-12/2019

Net sales 110,203 109,766 411,412Cost of goods sold -96,914 -100,142 -374,501Gross profit 13,289 9,624 36,911Other operating income 552 919 2,903Sales, marketing and administration expenses -7,144 -6,661 -27,268Research and development -680 -809 -3,376Other operating expenses -353 -111 -1,041Operating profit 5,664 2,961 8,129Net financial expenses -1,945 -1,297 -5,998Profit before income taxes 3,719 1,665 2,132Income taxes -174 -539 -1,907Profit / loss for the period 3,546 1,126 225

Earnings per share, EURBasic 0.06 0.02 0.00Diluted 0.06 0.02 0.00

Note the changes in the P&L statement: • Certain manufacturing

costs in costs of goods sold have been reclassified as SGA costs (figures restated, no impact to EBIT)

• Suominen no longer reports sales and marketing costs separately

Cash flow from operations

Cash flow from operations, EUR million Cash flow from operations, EUR million

5,2

10,8

7,78,5

-2,4

9,1

17,4

5,7

9,4

-5

0

5

10

15

20

Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20

27,3 28,5

22,2

32,129,9

9,4

0

5

10

15

20

25

30

35

2015 2016 2017 2018 2019 Q1/2020

April 23, 2020

Statement of cash flows

April 23, 2020

EUR thousand 1-3/2020 1-3/2019 1-12/2019

Cash flow from operationsProfit for the period 3,546 1,126 225Total adjustments to profit for the period 8,224 8,467 34,585Cash flow before changes in net working capital 11,770 9,592 34,810Change in net working capital -879 -10,443 1,631Financial items -1,399 -944 -5,222Income taxes -82 -557 -1,324Cash flow from operations 9,410 -2,352 29,895

Cash flow from investments -1,666 -3,160 -10,447

Cash flow from financing

Drawdown of current interest-bearing liabilities 10,000 5,000 38,000

Repayment of current interest-bearing liabilities -14,779 -5,715 -47,572Cash flow from financing -4,779 -715 -9,572

Cash and cash equivalents at the beginning of the period 37,741 27,757 27,757Effect of changes in exchange rates 485 351 109Change in cash and cash equivalents 2,965 -6,226 9,875

Cash and cash equivalents at the end of the period 41,190 21,881 37,741

Progress in strategy

April 23, 2020

Progress in strategy implementation

• Multi-year commercial cooperation agreement with Ahlstrom-Munksjö Ställdalen plant- Ställdalen manufactures Suominen’s HYDRASPUN® product family mainly for European market- HYDRASPUN® products are 100% biodegradable and produced from renewable materials- The products are considered category leader in the Moist Toilet Tissue (MTT) segment- Suominen produces the same products at Windsor Locks and Bethune plants in the USA and with the signed

agreement we improve our ability to serve our customers around the world

• Investment to enhance one production line in Italy- Card-Pulp-Card (CPC) capability- After the investment the line will be one of our most versatile and efficient lines - High customer interest for the products produced in the line- Strengthen our ability to respond to the growing demand for sustainable products- The investment will be finalized during the second half of 2021

• Suominen was the first nonwovens manufacturer to receive Water UK’s Fine to Flush certification

April 23, 2020

Outlook 2020

April 23, 2020

Outlook for 2020

April 23, 2020

• Suominen expects that in 2020 its comparable operating profit will improve clearly from 2019. However, it should be noted that the result estimate for the second half of the year is uncertain due to the COVID-19 pandemic. In 2019, Suominen’soperating profit amounted to EUR 8.1 million. In financial years 2020 and 2019 Suominen had no items affecting the comparability of the operating profit.

• Previous outlook for 2020 on January 29, 2020: Suominen expects that in 2020 its comparable operating profit will improve from 2019. In 2019, Suominen’s operating profit amounted to EUR 8.1 million.

Interim ReportJanuary–Juneon August 12,

2020

Suominen’s virtual Capital Markets Dayon May 26,

2020

17

Q&A

April 23, 2020

@SuominenOyjSuominen Corporation

@SuominenCorp

April 23, 2020