suominen corporation results presentation q1 2016

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


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%


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.

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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


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


Strategy2015–2017

4/28/2016 7


Strategy 2015–2017

4/28/2016 8


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


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


Financialreview Q14/28/2016 11


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.


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


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


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


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

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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


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


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


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


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

suominen corporation results presentation q1 2016

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