2014-10-24 07:30:01 CEST
2014-10-24 07:30:06 CEST
REGULATED INFORMATION
Suominen Oyj - Interim report (Q1 and Q3)
Suominen Corporation’s Interim Report for January 1 – September 30, 2014: net sales, operating profit and balance sheet improved; outlook regarding operating profit raised
Helsinki, Finland, 2014-10-24 07:30 CEST (GLOBE NEWSWIRE) -- Suominen
Corporation Interim Report 24 October 2014 at 8:30am (EEST)
SUOMINEN CORPORATION'S INTERIM REPORT FOR JANUARY 1 - SEPTEMBER 30, 2014:
NET SALES, OPERATING PROFIT AND BALANCE SHEET IMPROVED; OUTLOOK REGARDING
OPERATING PROFIT RAISED
KEY FIGURES Q3/ Q3/ Q1-Q3/ Q1-Q3/ Q1-Q4/
2014 2013 2014 2013 2013
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Net sales, EUR million 103.3 93.5 297.0 283.8 373.7
Operating profit before 8.7 5.8 20.6 15.2 19.4
non-recurring items, EUR million
Operating profit, EUR million 8.4 5.8 19.8 15.2 18.9
Profit/loss for the period, 0.6 2.6 5.4 5.1 5.7
EUR million, continuing operations
Profit/loss for the period, EUR million, -1.5 -2.4 -5.2 -20.3 -21.8
discontinued operations
Profit/loss for the period, -0.9 0.3 0.2 -15.2 -16.1
EUR million, total
Earnings/share, EUR, 0.00 0.01 0.02 0.02 0.02
continuing operations
Earnings/share, EUR, -0.01 -0.01 -0.02 -0.08 -0.09
discontinued operations
Earnings/share, EUR, Group 0.00 0.00 0.00 -0.06 -0.07
Cash flow from operations/share, 0.07 0.02 0.11 0.02 0.09
EUR*
Return on invested capital (ROI), % * 10.2 -5.9 10.2 -5.9 -0.7
Return on invested capital (ROI), %, 13.5 9.5 13.5 9.5 12.4
continuing operations
Gearing, % ** 43.3 112.5 43.3 112.5 96.2
* Including discontinued operations.
All figures in this interim report refer to continuing operations of the Group
unless otherwise stated. The figures are compared with those of the
corresponding period in 2013 unless otherwise stated. In accordance with IFRS
5, the comparison data of the balance sheets have not been revised and,
consequently, include discontinued operations.
Highlights in July- September 2014:
- Net sales increased by 10.5% and amounted to EUR 103.3 million (93.5).
- Operating profit excluding non-recurring items increased by 49.4% to EUR 8.7
million (5.8).
- Suominen divested its Flexibles business area to a private equity company and
the business area management on 14 July 2014.
- Suominen extended and diversified its financing by issuing a EUR 75 million
bond and renewing its bank facilities.
- Suominen updates its outlook statement regarding operating profit. The
company expects that for the full year 2014, its operating profit excluding
non-recurring items from continuing operations will increase to the vicinity of
EUR 25 million. Previously Suominen estimated that its operating profit
excluding non-recurring items from continuing operations will improve from year
2013 (MEUR 19.4; Nonwovens segment and unallocated items).
- Concerning net sales, Suominen repeats its estimate announced on 18 July
2014, according to which the company expects that for the full year 2014, its
net sales of the continuing operations will improve from year 2013 (MEUR 373.7)
President & CEO Nina Kopola comments on Suominen's third quarter of 2014:
“In Suominen's main market regions, Europe and North America, consumers'
confidence in the development of their personal finances weakened in the third
quarter of the year. Consumer confidence indices turned downward in both the US
and the euro area.
The weakening in confidence did not, however, have an effect on Suominen's
financial development during the period. Suominen's net sales grew more than
10% from the comparison period and totaled EUR 103.3 million. Influencing the
growth in net sales were the acquisition of the plant in Brazil in February
2014, the continuing favorable demand in the North American market and the
temporary change in the competitive situation in the European markets, which
boosted demand for Suominen's products.
Operating profit excluding non-recurring items increased to a new level, EUR
8.7 million, accounting for 8.4% of net sales. I am particularly pleased with
the improvement in our relative profitability. It reflects the increase in the
share of products with higher added value in our sales and proves that we are
heading in the right direction strategically. Cash flow from operations just
about quadrupled from the comparison period, and amounted to EUR 16.9 million.
Financial expenses were high in the third quarter due to refinancing costs.
Additional proof of the successful implementation of the strategy is the
achievement of our medium-term strategic targets: two out of three of these
targets are reviewed on quarterly basis and just like in the first and second
quarters of the year, in the July - September period Suominen reached thetarget level in these two. Our gearing declined further and was 43.4% (target
level 40-80%) at the end of September. The return on investment (ROI) from
continuing operations was 13.5% (target level >10%).
During the review period, we sold the Flexibles business area to a private
equity firm and the business area's management. The sale further clarified
Suominen's corporate structure and completed its transformation into a
nonwovens company with operations on three continents.
The purely nonwovens-focused, financially stable Suominen is ready for the new
strategy period of 2015-2017. The strategy for the coming years will highlight
the highly focused company's active development into a forerunner in nonwovens.
In terms of our financial targets, our emphasis for the future will be organic
net sales growth that exceeds the industry average. If we succeed in that
target, Suominen's net sales in 2017 will be in the region of EUR 500 million.
In September we renewed our financial base, including issuance of a bond, which
will enable us to execute our growth strategy.
Alongside our growth targets, we will continue, however, to uphold our relative
profitability and stable financial position. Our goal is to achieve a ROI of
more than 12% in the future, and to maintain our gearing at a healthy level,
i.e. between 40 and 80%. Today, 24 October 2014, we have also released a
separate stock exchange release concerning the next phase of our strategy.
In connection with our strategy update, Suominen's Board of Directors has
approved a dividend policy for the company. Suominen's policy is to distribute
approximately 30% of its profit for the period in annual dividends. In
assessing its proposal for the payment of dividends, the company's Board of
Directors will also consider Suominen's future investment needs and the
solidity of its financial position.”
GROUP NET SALES AND FINANCIAL RESULT (CONTINUING OPERATIONS)
July - September 2014
Suominen has two business areas, Convenience and Care. Convenience business
area supplies nonwovens as roll goods for wiping products. Care business area
manufactures nonwovens for hygiene products and medical applications. Until the
end of the financial year 2013, both business areas were reported in the Wiping
segment. In the interim report for January-March 2014, the business areas were
reported in Nonwovens segment. As from the interim report for January-June
2014, Suominen does not report any segments.
In July-September 2014, Suominen's net sales from continuing operations grew by
10.5% from the comparison period to EUR 103.3 million (93.5). Net sales of
Convenience business area were EUR 94.4 million and net sales of Care business
area EUR 8.9 million.
Operating profit before non-recurring items increased by 49% and amounted to
EUR 8.7 million (5.8). Operating profit after non-recurring items was EUR 8.4
million (5.8). The non-recurring items reported in the review period amounted
to EUR -0.3 million (0.0) and were attributable to restructuring costs as well
as costs related to the acquisition of the Brazilian unit. Profit before taxes
was EUR 4.0 million (4.5). Due to the refinancing and the discontinuing of the
hedge accounting for the interest rate hedging, a non-recurring loss of EUR 0.9
million was recognized. Also the remaining costs of EUR 2.0 million for the
previous syndicated loan were recognized in the financial expenses.
Profit for the period from continuing operations was EUR 0.6 million (2.6) and
from discontinued operations EUR -1.5 million (-2.4). The Group profit for the
period was EUR -0.9 million (0.3).
If calculated with the average USD exchange rate of July-September 2013, the
operating profit before non-recurring items would have been EUR 8.8 million
(5.8) and after them 8.4 (5.8).
Healthy demand for nonwovens continued in North American market. In Europe, the
demand for Suominen's products increased, partially due to temporary changes in
the competitive environment. On top of the good demand for the products, the
growth in net sales can be attributed to the increase of the share of products
with higher value add in portfolio and to the acquisition of the Brazilian unit
in February.
The increase in the share of products with higher added value in sales was
mirrored also in gross profit and, consequently, in improved operating profit.
Cash flow from operations was EUR 16.9 million (4.3) in July-September. During
the reporting period EUR 8.8 million (1.5 tied up) in working capital was
released.
January - September 2014
In January-September 2014, Suominen's net sales from continuing operations grew
by 4.6% from the comparison period to EUR 297.0 million (283.8).
Net sales of Convenience business area were EUR 272.9 million and net sales of
Care business area EUR 24.1 million. The main application areas for nonwoven
materials supplied by Suominen were baby wipes (accounting for 40% of the
sales), personal care wipes (22%), household wipes (17%), industrial wipes
(12%), and hygiene and medical products (8%). All wiping products belong to the
Convenience business area and all medical and hygiene products belong to the
Care business area. The share of products with higher added value grew in the
portfolio.
Operating profit before non-recurring items from continuing operations
increased by 35% and amounted to EUR 20.6 million (15.2). Operating profit
after non-recurring items was EUR 19.8 million (15.2). The non-recurring items
reported in the review period totaled EUR -0.9 million (0.0), of which EUR -1.1
million were costs related to restructuring measures and to the acquisition of
the Brazilian unit; and EUR 0.2 million were items related to the closing down
of the fiber production in Nakkila in 2012. Profit before taxes was EUR 12.7
million (10.5). Profit for the period from continuing operations was EUR 5.4
million (5.1) and from discontinued operations EUR -5.2 million (-20.3). The
Group profit for the period was EUR 0.2 million (-15.2).
Cash flow from operations was EUR 27.8 million (5.0) in January-September. As
of the beginning of the year, EUR 4.0 million (7.1 tied up) in working capital
was released.
BUSINESS COMBINATIONS AND DISCONTINUED OPERATIONS
Business combinations
Suominen completed the acquisition of Paulínia plant in Brazil from Ahlstrom
Corporation on 10 February 2014. The Paulínia plant was part of Ahlstrom´s
former Home and Personal business operations, acquired by Suominen in 2011, but
the acquisition of the Brazilian unit was prolonged due to delay in receiving
approval from the authorities and consequent renegotiations. The transaction
was implemented through acquisition of the shares of the local company. The
enterprise value of the transaction was EUR 17.5 million and the final
consideration EUR 19.6 million.
Due to the transaction Suominen's nonwovens business has now a foothold in the
growing South American market region. The acquired plant is the only nonwovens
manufacturing facility utilizing modern spunlace technology in production of
wiping products in Brazil. The plant employs some 40 people and its annual net
sales have amounted approximately to EUR 20 million.
Discontinued operations
Suominen reports in the discontinued operations Codi Wipes business unit,
divested in summer 2013 and the Flexibles business area sold in July 2014.
Prior to June 2013, Codi Wipes was reported as part of Suominen's Wiping
segment and prior to June 2014 Flexibles business as an individual segment.
The enterprise value of the Flexibles business amounted to EUR 20.3 million,
which includes a contingent consideration of EUR 1.0. Suominen has a loan
receivable of EUR 8.5 million and retains a minority shareholding of 19.9% in
the divested business. The cash component of the purchase price amounted to EUR
5.7 million. A revised non-recurring loss of EUR 5.9 million was recognized.
Suominen reported a non-recurring loss of EUR 5.2 million in the review period
in its discontinued operations.
The profit after taxes from discontinued operations was EUR -21.8 million in
January-December 2013.
GROUP PROFIT FOR THE PERIOD (INCLUDING DISCONTINUED OPERATIONS)
The Group profit for July-September 2014 including the discontinued operations
was EUR -0.9 million (0.3).
The Group profit for January-September 2014 including the discontinued
operations was EUR 0.2 million (-15.2).
FINANCING
In September 2014, Suominen renewed its financing. The syndicated credit
facility withdrawn in 2011 was fully amortized and its mortgages were released.
As a substitute, Suominen issued a bond and agreed a new syndicated EUR 55
million loan facility with banks.
On 23 September 2014, Suominen issued a EUR 75 million bond to be listed in the
NASDAQ OMX Helsinki Stock Exchange. Principal amount of each book-entry unit of
the senior unsecured notes is EUR 1,000, with an ISIN code FI40000108576. Each
note will be freely transferable after it has been registered into the
respective book-entry account.
The notes constitute direct and unsecured obligations of Suominen and they are
guaranteed as for own debt by the Guarantors, i.e. subsidiaries of Suominen
Corporation.
The notes bear interest from, and including, September 23, 2014 at the rate of
4.375 percent per annum until 23 September 2019, when the notes shall be repaid
in full at their principal amount.
In connection with issuing the bond, Suominen entered into a syndicated credit
facilities agreement totaling EUR 55 million in September. It consists of a
term loan of EUR 10 million with a maturity of three years; a multicurrency
revolving credit facility of EUR 30 million with a maturity of three years; and
an investment loan of EUR 15 million with a maturity of four years. The
facilities are guaranteed as for own debt by the subsidiaries of Suominen
Corporation.
The Group's interest-bearing net liabilities amounted to EUR 44.6 million
(89.7) at the end of the review period.
In January-September, net financial expenses were EUR 7.1 million (4.7), or
2.4% (1.7%) of net sales. Due to the refinancing and the discontinuing of the
hedge accounting for the interest rate hedging, a non-recurring loss of EUR 0.9
million was recognized. Also the remaining costs of EUR 2.0 million for the
previous syndicated loan were recognized in the financial expenses.
A total of EUR 4.0 million of working capital was released (tied up 7.1). Trade
receivables amounting to EUR 6.0 million were sold to the bank. The equity
ratio was 41.0% (33.1%). Cash flow from operations was EUR 27.8 million (5.0),
representing a cash flow of EUR 0.11 per share (0.02).
CAPITAL EXPENDITURE
The gross investments of the continued operations totaled EUR 4.4 million
(1.4). Planned depreciation of the continuing operations amounted to EUR 11.4
million (10.4). Suominen invested EUR 1.7 million in capacity expansion of high
value added nonwovens at the Windsor Locks plant in the United States and EUR
1.0 million in intangible assets. Other investments were in maintenance. The
investments of the discontinued operations were EUR 0.6 (1.2) million.
INFORMATION ON SHARES AND SHARE CAPITAL
Share capital
The registered number of Suominen's issued shares totals 247,934,122 shares,
equaling to a share capital of EUR 11,860,056.00.
Share trading and price
The number of Suominen Corporation shares traded on NASDAQ OMX Helsinki from 1
January to 30 September 2014 was 24,422,736 shares, accounting for 9.9% of the
share capital and votes. The trading price varied between EUR 0.47 and EUR
0.62. The closing trading price was EUR 0.58, giving the company a market
capitalization of EUR 142,755,750 on 30 September 2014.
Own shares
On 1 January 2014 Suominen Corporation held 1,924,367 of its own shares. On 5
June 2014, the portion of the remuneration of the Board of Directors to be paid
in shares, in total 120,848 shares, was delivered in accordance with the
decision by the Annual General Meeting. On 30 September 2014, Suominen held
1,803,519 own shares, accounting for 0.7% of the share capital and votes.
Share-based incentive plan
On 30 September 2014, the target group for Suominen's share-based incentive
plan included seven employees. One employee left the program during the review
period. At the end of the financial period, the rewards to be paid on the basis
of the plan corresponded to a maximum value of roughly 2,383,333 Suominen
Corporation shares in total, including the portion to be paid in cash. The aim
of the plan is to align the objectives of shareholders and key employees in
order to increase the value of the company, to commit the key employees to the
company, and to offer them a competitive reward plan based on long-term
shareholding in the company. The plan covers one performance period: the
calendar years 2012-2014. The potential reward from the performance period will
be based on Suominen Group's cumulative Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) and cumulative cash flow, and it will be
paid in 2015 partly in company shares and partly in cash.
Extraordinary General Meeting and hybrid bond
Suominen issued on 10 February 2014 a convertible hybrid bond of EUR
17,500,000, treated as equity, to finance the acquisition of the nonwovens
business operations in Brazil. The bond was oversubscribed. The bond consists
of 175 bond notes, each having the nominal value of EUR 100,000. The bond does
not have a guarantee or other collateral. The principal of the bond has a fixed
annual interest of 5.95% until 10 February 2018. After that date, the principal
of the bond will have a fixed annual interest of 6.95% until 10 February 2019.
After that date, the principal of the bond will have a fixed annual interest of
7.95%. The interest accrued for the bond by 10 February 2018 will be
capitalized to the principal of the bond annually on 10 February. Thereafter
and commencing on 10 May 2018, the interest is payable in the discretion of the
Board of Directors quarterly on 10 February, 10 May, 10 August and 10 November.
No interest shall be paid on the capitalized interest until 10 February 2018.
After that date, the capitalized interest shall be a part of the actual
principal of the bond and annual interest shall be paid to the whole amount of
the principal according to the interest terms of the bond.
Suominen has the right to redeem the bond in whole or in part on 10 February
2018 or thereafter, on each interest payment date, at the nominal value of the
bond together with the accrued interest.
A bond note entitles the bondholder to convert the bond note and the potential
capitalized interest for shares in Suominen at the conversion rate of EUR 0.50
per share. The period for converting starts on 11 February 2014 and ends on 10
February 2018. The number of shares to be received through the conversion must
always be at least 200,000. If the total value of the bond including interest
accrued were converted through an issue of new shares, the number of shares in
Suominen might increase by no more than 43,330,000 on the basis of the
conversion.
The conversion rate shall be recorded under the invested non-restricted equity
fund.
A precondition for issuing the hybrid bond was a resolution made by the
Extraordinary General Meeting (EGM) held on 31 January 2014, according to which
the Board of Directors of the company was authorized to decide on the granting
of stock options and other special rights entitling to shares referred to in
Chapter 10, Section 1 of the Companies Act. The special rights carry the right
to receive against payment new shares in the company or own shares held by the
company. A special right may also be granted to a creditor of the company on
the condition that the creditor´s receivables are used to set off against the
subscription price of shares. The maximum number of new shares that may be
subscribed and/or own shares held by the company that may be conveyed by virtue
of the special rights granted by the company is 43,333,000 shares in total.
The EGM authorized the Board of Directors of Suominen to decide on all terms
and conditions related to granting the special rights. The authorization is
valid until further notice, however no longer than five years from the date of
the authorization given by the general meeting. The authorizations did not
revoke any earlier decisions regarding granting of stock options and other
special rights entitling to shares.
Annual General Meeting
The Annual General Meeting (AGM) of Suominen Corporation was held on 26 March,
2014. The AGM decided that no dividend will be paid for the financial year
2013.
The AGM adopted the financial statements and the consolidated financial
statements for the financial year 2013 and discharged the members of the Board
of Directors and the President & CEO from liability.
The AGM confirmed the number of members of the Board of Directors to be five
(5). The AGM re-elected Mr Risto Anttonen, Mr Jorma Eloranta, Ms Suvi Hintsanen
and Mr Hannu Kasurinen as members of the Board of Directors, and elected Ms
Jaana Tuominen as a new member of the Board of Directors for the next term of
office, expiring at the end of the first Annual General Meeting following their
election. The remuneration of the members of the Board of Directors was
resolved to maintain unchanged. The resolutions were in accordance with the
proposals submitted by the Nomination Board of Suominen's shareholders. In its
constitutive meeting, the Board of Directors elected Jorma Eloranta as its
Chair and Risto Anttonen as Deputy Chair.
PricewaterhouseCoopers Oy, Authorized Public Accountants, was re-elected as
auditor, with Heikki Lassila, Authorized Public Accountant, as the principal
auditor of Suominen Corporation.
The AGM authorized the Board of Directors to decide on the repurchase of the
company's own shares and to decide on a share issue and issuance of special
rights entitling to shares referred to in Chapter 10, Section 1 of the
Companies Act.
Nomination Board
In accordance with the decision taken by the Annual General Meeting of Suominen
Corporation, the representatives notified by the company's three largest
shareholders were appointed to Suominen Corporation's permanent Nomination
Board. The shareholders entitled to appoint members to the Nomination Board
were determined on the basis of the registered holdings in the company's
shareholders' register on 1 September 2014.
The representatives appointed to the Nomination Board were Marco Levi,
President & CEO of Ahlstrom Corporation; Timo Ritakallio, Deputy CEO of
Ilmarinen Mutual Pension Insurance Company; and Reima Rytsölä, Chief Investment
Officer of Varma Mutual Pension Insurance Company. Jorma Eloranta, Chair of
Suominen's Board of Directors, serves as the fourth member of the Nomination
Board.
On 23 September 2014, the Nomination Board appointed from among its members
Marco Levi, President & CEO of Ahlstrom Corporation, to act as the Chairman.
After the review period, the composition of the Nomination Board changed due to
the change in the largest shareholder of Suominen Corporation after a share
transaction announced on 7 October 2014. Marco Levi, CEO of Ahlstrom
Corporation and Chairman of the Nomination Board of Suominen, resigned from his
position. Mr Thomas Ahlström, Managing Director of Antti Ahlström Perilliset Oy
and a member of the Board of Directors at Ahlström Capital Oy, was nominated to
represent AC Invest Two B.V. in the Nomination Board on 13 October 2014.
Further, the Nomination Board elected him as the Chairman of the Nomination
Board.
Authorizations of the Board of Directors
The Annual General Meeting (AGM) held on 26 March 2014 authorized the Board of
Directors to repurchase a maximum of 3,000,000 of the company's own shares. The
authorization shall be valid until 30 June 2015.
The Board of Directors is also authorized, by the AGM held on 26 March 2014, to
decide on issuing new shares and/or conveying the company's own shares held by
the company and/or granting special rights entitling to shares referred to in
Chapter 10, Section 1 of the Finnish Companies Act. New shares may be issued
and/or company's own shares held by the company or its group company may be
conveyed at the maximum amount of 25,000,000 shares in aggregate. The maximum
number of new shares that may be subscribed and own shares held by the company
that may be conveyed by virtue of the options and other special rights granted
by the company is 25,000,000 shares in total which number is included in the
maximum number stated earlier. The authorizations revoke the authorizations
decided by the AGM on 26 March 2013 regarding share issue and issuance of
special rights entitling to shares, but do not revoke the authorization decided
by the Extraordinary General Meeting on 31 January 2014 regarding granting of
stock options and other special rights entitling to shares. The authorizations
shall be valid until 30 June 2017.
The portion of the remuneration of the members of the Board of Directors which
shall be paid in shares
The Annual General Meeting (AGM) of Suominen Corporation held on 26 March 2014
resolved to keep the remuneration to the members of the Board of Directors
unchanged. In 2014, the Chair will be paid an annual fee of EUR 50,000, Vice
Chair of the Board an annual fee of EUR 37,500 and other Board members an
annual fee of EUR 28,000. Further, the members of the Board will receive a fee
of EUR 500 for each meeting held in the home country of respective member and a
fee of EUR 1,000 per each meeting held elsewhere than in the home country of
respective member. 60 % of the annual remuneration is paid in cash and 40 % in
Suominen Corporation's shares.
The portion of the above remuneration to be paid in shares was delivered on 5
June 2014 by transferring own shares held by Suominen Corporation without
consideration, in accordance with the authorization by the AGM. The transferred
shares are of the same class as the company's other shares. The number of
shares transferred was determined based on the share value in the stock
exchange trading maintained by NASDAQ OMX Helsinki Ltd, and calculated as the
trade volume weighted average quotation of the share during the one month
period immediately following the date on which the interim report of
January-March 2014 of the company was published. In total 120,848 shares were
given out of the own shares held by the company by the decision of the Board of
Directors on 5 June 2014. Since the decision taken by the Board of Directors
was essentially an execution of a detailed resolution taken by the AGM, the
Board did not exercise independent discretion when it decided on the transfer
of the shares.
Permanent committees
After the Annual General Meeting held on 26 March 2014, Suominen Corporation's
Board of Directors decided in its constitutive meeting that the earlier
Remuneration Committee will be altered to Personnel and Remuneration Committee.
Jorma Eloranta was elected as Chair and Risto Anttonen as a member of the
committee.
Hannu Kasurinen was elected as Chair and Suvi Hintsanen and Jaana Tuominen as
members of the Audit Committee.
Notifications under Chapter 9, Section 10 of the Securities Market Act in 1
January - 30 September 2014
During the review period, 1 January - 30 September 2014, Suominen received the
following notifications referred to in Chapter 9, Section 5 of the Securities
Market Act:
Oy Etra Invest Ab, business identity code 0672234-6 notified on 5 February 2014
about an agreement or other arrangement that, if realized, would result in the
crossing of the 5% notification threshold as referred to in the Chapter 9
Section 5 of the Securities Market Act and calculated from the total number of
shares and voting rights. The notification was made for Erkki Etola, Oy Etra
Invest Ab and Tiiviste-Group Oy (business identity code 0115121-4) together.
Erkki Etola has a controlling interest on Oy Etra Invest Ab and Tiiviste-Group
Oy.
Share of all shares and voting rights after crossing of the notification
threshold would be:
Oy Etra Invest Ab: number of shares 15,823,320 and share of all shares and
voting rights 5.43%
Erkki Etola: number of shares 4,016 and share of all shares and voting rights
0.00%
Tiiviste-Group Oy: number of shares 3,000,000 and share of all shares and
voting rights 1.03%
Oy Etra Invest Ab, Erkki Etola and Tiiviste-Group Oy in total: number of shares
18,827,336 and share of all shares and voting rights 6.46%
Ahlstrom Corporation (business identity code 1670043-1) notified on 5 February
2014 about an agreement or other arrangement that, if realized, would result in
the acquisition or disposal of shares or voting rights. According to the
notification, the ownership and the voting rights of Ahlstrom Corporation may
decrease so that the following thresholds will be crossed: 25%, 20%, 15%, 10%
or 5%.
Ahlström Capital Oy (business identity code 1670034-3) and AC Invest Two B.V.
(registration code 51490943) notified on 5 February about an agreement or other
arrangement that, if realized, would result in the acquisition or disposal of
shares or voting rights. According to the notification, the ownership and the
voting rights may increase so that the following thresholds will be reached or
crossed: 5%, 10%, 15%, 20% or 25%.
Ahlstrom Corporation (business identity code 1670043-1) notified on 10 January
2014 about an agreement or other arrangement that, if realized, would result in
the acquisition or disposal of shares or voting rights. According to the
notification the ownership and the voting rights may increase or decrease so
that the following thresholds will be reached or crossed: 5%, 10%, 15%, 20%,
25% or 30%.
Ahlström Capital Oy (business identity code 1670034-3) and AC Invest Two B.V.
(registration code 51490943) notified on 10 January 2014 about an agreement or
other arrangement that, if realized, would result in the acquisition or
disposal of shares or voting rights. According to the notification the
ownership and the voting rights may increase so that the following thresholds
will be reached or crossed: 5%, 10%, 15%, 20%, 25% or 30%.
CHANGES IN MANAGEMENT IN 1 JANUARY - 30 SEPTEMBER
Ms Lynda A. Kelly joined Suominen as Senior Vice President, Care business area
and a member of the Corporate Executive Team on 12 May 2014. Lynda A. Kelly has
a long and wide-ranging experience in nonwovens business, especially in
hygiene, medical and wiping products. Lynda A. Kelly, a US citizen, will report
to Ms Nina Kopola, President & CEO of Suominen Corporation.
Mr Dan Dunbar joined Suominen as Vice President, Sourcing and a member of the
Corporate Leadership Team on 14 July 2014. Dan Dunbar is an experienced
sourcing professional with a versatile background in globally operating
organizations. Dan Dunbar, a US citizen, will report to Ms Nina Kopola,
President & CEO of Suominen Corporation.
Mr Reima Kerttula, Senior Vice President, Flexibles, resigned from Suominen
Corporate Executive Team on 14 July, 2014 due to the divestment of Flexibles
business area.
EVENTS AFTER THE REVIEW PERIOD
Change in the shareholding
On 7 October 2014, Suominen Corporation received notifications referred to in
Chapter 9, Section 5 of the Securities Market Act from both Ahlstrom
Corporation (business identity code 1670043-1) and from AC Invest Two B.V.
(business identity code 51490943), which is a group company of Ahlström
Capital. According to the notifications, AC Invest Two B.V. acquires in total
66,666,666 Suominen shares from Ahlstrom Corporation, based on the option
agreement disclosed on 10 January 2014. The number of shares to be acquired
presents 26.89% of all shares and votes in Suominen Corporation. Due to the
acquisition, the shareholding of AC Invest Two B.V. in Suominen Corporation
exceeded the flagging threshold of 25% and increased into 67,724,176 shares,
corresponding to 27.32% of shares and votes in Suominen Corporation. According
to the notification by AC Invest Two B.V, their earlier shareholding in
Suominen Corporation was below 5% of all shares and votes.
According to the notification by Ahlstrom Corporation, due to the divestment of
the shares, the shareholding of Ahlstrom Corporation in Suominen Corporation
decreases to zero. Ahlstrom Corporation's earlier shareholding in Suominen
Corporation was 26.89 % of all shares and votes.
Change in the Nomination Board
Due to the transaction described above, AC Invest Two B.V. became entitled to
nominate a representative to Suominen's Nomination Board. Marco Levi, CEO of
Ahlstrom Corporation and Chairman of the Nomination Board of Suominen, resigned
from his position. Mr Thomas Ahlström, Managing Director of Antti Ahlström
Perilliset Oy and a member of the Board of Directors at Ahlström Capital Oy,
was nominated to represent AC Invest Two B.V. in the Nomination Board. Further,
the Nomination Board elected him as the Chairman of the Nomination Board.
The other members of the Nomination Board of Suominen Corporation are as
announced on 2 September 2014: Timo Ritakallio, Deputy CEO of Ilmarinen Mutual
Pension Insurance Company; Reima Rytsölä, Chief Investment Officer of Varma
Mutual Pension Insurance Company; and Jorma Eloranta, Chair of Suominen's Board
of Directors.
BUSINESS RISKS AND UNCERTAINTIES
The estimate on the development of Suominen's net sales is in part based on
forecasts and delivery plans received from customers. Changes in these
forecasts and plans resulting from changes in the market conditions or in
customers' inventory levels may affect Suominen's net sales. Due to the
continued uncertainty in the general economic situation and the cautious
consumer purchasing habits, the forecasts include uncertainty.
Suominen's customer base is fairly concentrated, which adds to the
customer-specific risk. Long-term contracts are preferred in the case of the
largest customers. In practice the customer relationships are long-term and
last for several years.
The continued positive development of Suominen's business operations in the
United States increases the relevance of the exchange rate risk related to USD
in the Group's total exchange risk position. Suominen hedges this foreign
exchange position in accordance with its hedging policy.
Suominen purchases significant amounts of pulp- and oil-based raw materials
annually. Raw materials are the largest cost item for operations. Rapid changes
in the global market prices of raw materials affect the company's
profitability. Extended interruptions in the supply of Suominen's main raw
materials could disrupt production and have a negative impact on the Group's
overall business operations. As Suominen sources its raw materials from a
number of major international suppliers, significant interruptions are
unlikely.
Suominen has numerous regional, national and international competitors in its
different product groups. There is currently oversupply in several product
groups, particularly in Europe. If Suominen is not able to compete through an
attractive product offering, it may lose some of its market share, and the
competition may lead to increased pricing pressure on the company's products.
Due to the acquisition of the manufacturing plant in Brazil, the risks that are
characteristic to any developing region, including significant changes in
business environment or exchange rates, could have an impact on Suominen's
operations in Brazil.
The Group's damage risks are insured in order to guarantee the continuity of
operations. Suominen has valid damage and business interruption insurance
according to which it is estimated that the damages can be covered and the
financial losses caused by an interruption compensated.
The sensitivity of Suominen's goodwill to changes in business conditions is
described in the notes to the financial statements 2013. Actual cash flows may
deviate from the forecasted future discounted cash flows, as the long economic
lifetime of the company's non-current assets, and changes in the estimated
product prices, production costs, and interest rates used in discounting may
result in write-downs. The fair value based on the value in use of assets or
businesses in total or in part does not necessarily correspond to the price
that a third party would pay for them.
General risks related to business operations are described in the Report of the
Board of Directors 2013.
BUSINESS ENVIRONMENT
Suominen's products are used in daily consumer goods, such as wet wipes,
hygiene product and medical nonwovens. The general economic situation
determines the development of consumer demand, even though the demand for
consumer goods is not very cyclical in nature. Europe and North America are the
main market regions for Suominen.
In Europe and North America, consumers' confidence in the development of their
personal finances weakened in the third quarter of the year. Consumer
confidence indices turned downwards in both the US and the euro area. The
outlook of the general economic situation in Europe remains uncertain and the
competitive environment of the European nonwovens market remains tight.
Suominen assesses the trend in the demand for its products on the basis of both
the general market situation and, above all, on the basis of the framework
agreements drawn up with its customers. Suominen estimates that in 2014, the
demand for its products will continue to grow at the pace of 2013 on average.
OUTLOOK FOR 2014
Suominen updates its outlook statement concerning operating profit. The company
expects that for the full year 2014, its operating profit excluding
non-recurring items from continuing operations will increase to the vicinity of
EUR 25 million. Previously Suominen estimated that its operating profit
excluding non-recurring items from continuing operations will improve from year
2013 (MEUR 19.4; Nonwovens segment and unallocated items).
Concerning net sales, Suominen repeats its estimate announced on 18 July 2014,
according to which the company expects that for the full year 2014, its net
sales of the continuing operations will improve from year 2013 (MEUR 373.7)
SUOMINEN GROUP CONSOLIDATED 1 JANUARY - 30 SEPTEMBER 2014
This interim report has been prepared according to the principles defined in
IAS 34 Interim Financial Reporting. The principles for preparing the interim
report are the same as those used for preparing the financial statements for
2013, and this interim report should be read parallel to the financial
statements for 2013. Changes to published accounting standards and
interpretations, together with the new accounting standards that came into
force on 1 January 2014, are presented in the financial statements for 2013.
The figures in this interim report have not been audited.
BALANCE SHEET EUR 1,000 30 Sep 30 Sep 31 Dec
2014 2013 2013
--------------------------------------------------------------------------------
Assets
Non-current assets
Goodwill 15,496 15,496 15,496
Intangible assets 12,434 11,486 12,025
Tangible assets 88,553 101,355 98,640
Loan receivables 8,531
Available-for-sale financial assets 942 25 939
Held-to-maturity investments 449 450 451
Other non-current receivables 980 511 511
Deferred tax assets 5,004 6,105 5,778
--------------------------------------------------------------------------------
Non-current assets, total 132,389 135,428 133,838
Current assets
Inventories 29,623 36,691 31,908
Trade receivables 50,639 52,973 46,908
Loan receivables 59 131
Other current receivables 5,971 7,373 6,359
Income tax receivables 697 1,260 1,182
Cash at bank and in hand 31,778 9,504 18,585
--------------------------------------------------------------------------------
Current assets, total 118,767 105,801 105,073
Assets, total 251,156 241,229 238,911
Shareholders' equity and liabilities
Equity attributable to owners of the parent
company
Share capital 11,860 11,860 11,860
Share premium account 24,681 24,681 24,681
Invested non-restricted equity fund 97,192 97,054 97,123
Fair value and other reserves -96 -837 -1,042
Translation differences 2,650 -1,958 -3,022
Other shareholders' equity * 51,386 -51,048 -51,094
--------------------------------------------------------------------------------
Shareholders' equity 84,901 79,752 78,506
Hybrid bond 18,162
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity, total 103,063 79,752 78,506
Liabilities
Non-current liabilities
Deferred tax liabilities 7,413 5,471 7,183
Provisions 605 132
Debentures 75,000
Other non-current liabilities * 1,866 1,197 1,125
Interest-bearing liabilities 6,667 75,264 70,399
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities, total 90,946 82,537 78,839
Current liabilities
Interest-bearing liabilities 3,367 24,071 24,071
Income tax liabilities 1,688 1,500 144
Trade payables and other current liabilities 52,092 53,369 57,351
--------------------------------------------------------------------------------
Current liabilities, total 57,147 78,940 81,567
Liabilities, total 148,093 161,477 160,405
Shareholders' equity and liabilities, total 251,156 241,229 238,911
STATEMENT OF INCOME
EUR 1,000 Q3/2014 Q3/2013 Q1-Q3/20 Q1-Q3/20 Q1-Q4/20
14 13 13
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 103,291 93,484 296,984 283,847 373,684
Cost of goods sold -88,071 -83,326 -259,509 -253,107 -333,580
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross profit 15,220 10,158 37,475 30,739 40,104
Other operating income 659 419 1,966 1,653 2,485
Sales and marketing expenses -1,428 -1,280 -4,585 -3,952 -5,583
Research and development -665 -721 -2,062 -2,408 -3,139
Administration expenses -3,428 -2,616 -10,327 -10,134 -13,659
Other operating expenses -1,648 -130 -1,849 -674 -810
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before 8,710 5,830 20,618 15,224 19,398
non-recurring items
Non-recurring items -349 -860 -482
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 8,361 5,830 19,758 15,224 18,916
Financial income and expenses -4,334 -1,319 -7,077 -4,685 -5,781
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit before income taxes 4,027 4,511 12,681 10,539 13,135
Income taxes -3,378 -1,877 -7,264 -5,450 -7,419
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period, 649 2,634 5,417 5,089 5,716
continuing operations
Discontinued operations -77 -915 716 -2,076 -3,518
Profit/loss for the period
Impairment loss recognized on -1,422 -1,436 -5,921 -18,196 -18,314
the remeasurement to fair value
and cost to sell
--------------------------------------------------------------------------------
Profit/loss for the period, -1,499 -2,351 5,205 -20,272 -21,832
discontinued operations
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period -850 283 212 -15,183 -16,119
Earnings/share, EUR 0.00 0.01 0.02 0.02 0.02
Continuing operations
Discontinued operations -0.01 -0.01 -0.02 -0.08 -0.09
Total 0.00 0.00 0.00 -0.06 -0.07
Diluted, total 0.00 0.00 0.00 -0.06 -0.07
STATEMENT OF COMPREHENSIVE INCOME
EUR 1,000 Q3/201 Q3/201 Q1-Q3/201 Q1-Q3/201 Q1-Q4/201
4 3 4 3 3
--------------------------------------------------------------------------------
----------
Profit/loss for the period -850 283 212 -15,183 -16,119
Other comprehensive income:
Items that may be reclassified
subsequently to profit or loss:
Currency translation 3,764 -1,423 5,997 -1,592 -2,664
differences on
foreign operations
Fair value changes of cash flow 1,040 -140 1,182 551 353
hedges
Items related to discontinuing 355
operations
Other reclassifications 83 191 25 -137 325
----------
--------------------------------------------------------------------------------
Total 4,887 -1,372 7,204 -1,178 -1,631
Items that will not be reclassified
subsequently to profit or loss:
Actuarial gains and losses 61 61 18
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 0 61 0 61 18
Income tax on other -501 171 -561 107 120
comprehensive income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total other comprehensive 4,386 -1,141 6,643 -1,010 -1,493
income
Total comprehensive income for 3,536 -857 6,855 -16,193 -17,612
the period
Total comprehensive income
arises from:
Continuing operations 3,144 1,493 12,060 4,078 4,220
Discontinued operations -5,514 -2,351 -5,205 -20,272 -21,832
--------------------------------------------------------------------------------
Total comprehensive income for 3,536 -857 6,855 -16,193 -17,612
the period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
a. Share capital
b. Share premium account
c. Invested non-restricted equity fund
d. Own shares
e. Translation differences
f. Fair value reserves
g. Other shareholders' equity
h. Shareholders' equity
i. Hybrid bond
j. Shareholders' equity total
EUR a. b. c. d. e. f. g. h. i.
j.
1,000
--------------------------------------------------------------------------------
---
--------------------------------------------------------------------------------
---
Total 11,860 24,681 97,123 -43 -3,022 -999 -51,094 78,506
78,506
equit
y at
1 Jan
2014
Profit 212 212
212
/loss
for
the
perio
d
Other 5,672 946 14 6,632
6,632
compr
ehensi
ve
income
Share- 11 11
11
based
payme
nts
Convey 69 69
69
ance
of own
shares
Hybrid -529 -529 18,162
17,633
bond
--------------------------------------------------------------------------------
---
--------------------------------------------------------------------------------
---
Total 11,860 24,681 97,192 -43 2,650 -53 -51,386 84,901 18,162
103,063
equit
y at
30 Sep
2014
EUR a. b. c. d. e. f. g. h. i.
j.
1,000
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Total 11,860 24,681 97,054 -43 -549 -1,209 -35,783 96,011
96,011
equit
y at
1 Jan
2013
Profit -15,183 -15,183
-15,183
/loss
for
the
period
Other -1,409 416 -18 -1,011
-1,011
compr
ehensi
ve
income
*
Share- 3 3
3
based
payme
nts
Convey -69 -69
-69
ance
of own
shares
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Total 11,860 24,681 97,054 -43 -1,958 -793 -51,048 79,752
79,752
equit
y at
30 Sep
2013
EUR a. b. c. d. e. f. g. h. i.
j.
1,000
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Total 11,860 24,681 97,054 -43 -549 -1,209 -35,783 96,011
96,011
equit
y at
1 Jan
2013
Profit -16,119 -16,119
-16,119
/loss
for
the
period
Other -2,472 210 770 -1,493
-1,493
compr
ehensi
ve
income
Share- 38 38
38
based
payme
nts
Convey 69 69
69
ance
of own
share
s
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Total 11,860 24,681 97,123 -43 -3,021 -999 -51,094 78,506
78,506
equit
y at
31 Dec
2013
CASH FLOW STATEMENT
EUR 1,000 Q1-Q3/201 Q1-Q3/201 Q1-Q4/201
4 3 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operations
Operating profit 19,758 15,224 18,916
Total adjustments 14,860 6,048 7,704
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow before change in working capital 34,618 21,272 26,620
Change in working capital 3,985 -7,130 6,482
Financial items -5,982 -4,965 -6,216
Taxes paid -4,839 -4,143 -5,556
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from operations 27,783 5,035 21,330
Investment payments
Investments in tangible and intangible assets -5,291 -2,693 -5,598
Business combinations -19,261
Proceeds from disposed business operations 4,736 3,441 3,441
Proceeds from disposal of fixed assets and 31 60 785
other proceeds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities -19,785 807 -1,372
Financing
Non-current loans drawn 10,000 113
Repayments of non-current loans -78,213 -16,848 -21,042
Repayments of capital loans -920 -920
Hybrid bond 17,500
Debentures 75,000
Change in current loans -18,318 6,300 6,300
--------------------------------------------------------------------------------
Cash flow from financing 5,969 -11,355 -15,662
Change in cash and cash equivalents * 13,967 -5,513 4,296
Cash and cash equivalents 18,585 14,301 14,301
Unrealized exchange rate differences -775 715 -13
Change in cash and cash equivalents 13,967 -5,513 4,296
--------------------------------------------------------------------------------
Cash and cash equivalents 31,778 9,504 18,585
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets held for sale, cash and cash equivalents
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents, continuing 31,778 9,504 18,585
operations
Cash flow statement includes discontinued operations.
KEY FIGURES Q3/2014 Q3/2013 Q1-Q3/201 Q1-Q3/2013 Q1-Q4/2013
4
Net sales, change, % * 10.5 -4.3 4.6 4.3 4.7
Gross profit, % ** 14.7 10.9 12.6 10.8 10.7
Operating profit, % ** 8.1 6.2 6.7 5.4 5.1
Financial income and -4.2 -1.4 -2.4 -1.7 -1.5
expenses, % **
Profit before income taxes, 3.9 4.8 4.3 3.7 3.5
% **
Profit for the period, %, 0.6 2.8 1.8 1.8 1.5
continuing operations
Profit for the period, %, -1.5 -2.5 -1.8 -7.1 -5.8
discontinued operations **
Profit for the period, % ** -0.8 0.3 0.1 -5.3 -4.3
Earnings/share, EUR, 0.00 0.01 0.02 0.02 0.02
continuing operations
Earnings/share, EUR, -0.01 -0.01 -0.02 -0.08 -0.09
discontinued operations
Earnings/share, EUR, Group 0.00 0.00 0.00 -0.06 -0.07
Diluted earnings/share, 0.00 0.00 0.00 -0.06 -0.07
EUR, total
Equity/share, EUR 0.42 0.32 0.42 0.32 0.32
Cash flow from 0.07 0.02 0.11 0.02 0.09
operations/share, EUR
Return on equity (ROE), % -0.8 -28.5 -0.8 -28.5 -18.6
Return on invested capital 10.2 -5.9 10.2 -5.9 -0.7
(ROI),
Return on invested capital 13.5 9.5 13.5 9.5 12.4
(ROI), %, continuing
operations
Equity ratio, % 41.0 33.1 41.0 33.1 32.9
Gearing, % 43.3 112.5 43.3 112.5 96.2
Gross investments, 951 700 4,441 1,420 4,413
EUR 1,000, continuing
operations
Depreciation, EUR 1,000, 3,953 3,480 11,434 10,445 13,892
continuing operations
Average personnel, 592 544 550
continuing operations
*Compared with the same period last year.
** Share of net sales.
Non-current interest- 81,667 75,264 81,667 75,264 70,399
bearing liabilities
Current interest-bearing 3,367 24,071 3,367 24,071 24,071
liabilities
Interest-bearing receivables * -40,443 -9,606 -40,443 -9,606 -18,985
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Interest-bearing net liabilities 44,591 89,729 44,591 89,729 75,485
* Includes interest-bearing loan receivables of EUR 8.5 million granted to the
divested Flexibles business.
BUSINESS COMBINATIONS
Suominen acquired the Brazilian unit of the Ahlstrom Home and Personal
nonwovens business on 10 February 2014. The main parts of the Home and Personal
nonwovens business were acquired in 2011, but due to the delays for some
licenses and authorizations the acquisition of the Brazilian business was
prolonged. Thanks to the acquisition, Suominen's nonwovens business has a
better coverage on the South American markets.
The balance sheet and the income statement of the Brazilian company were
consolidated to Suominen as from 1 February 2014.
The shares of the local company were acquired. The enterprise value was EUR
17.5 million. The final consideration was EUR 19.6 million.
Consideration Fair
value
--------------------------------------------------------------------------------
Cash 19,558
Recognized amounts of identifiable assets acquired and liabilities Fair
assumed according to the initial calculations: values
1 000 e
--------------------------------------------------------------------------------
Property, plant and equipment 10,463
Intangible assets 20
Other non-current receivables 1,392
Inventories 3,195
Trade and other receivables 5,084
Cash 297
--------------------------------------------------------------------------------
Total assets 20,452
Financial liabilities 416
Other liabilities 478
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 894
--------------------------------------------------------------------------------
The identifiable net assets 19,558
The transaction costs of EUR 0.2 million are reported in the non-recurring
items.
The Group´s net sales would have been EUR 298.5 million and operating profit
EUR 20.2 million, if the transaction had been realized at the start of 2014 and
the costs in the end of 2013.
DISCONTINUED OPERATIONS
EUR 1,000 Q1-Q3/2 Q1-Q3/2 Q1-Q4/2
014 013 013
--------------------------------------------------------------------------------
Net sales 32,521 44,115 59,438
Costs -31,608 -45,836 -62,601
--------------------------------------------------------------------------------
Profit before income taxes from discontinued 913 -1,721 -3,163
operations
Income taxes -197 34 -231
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit after income taxes from discontinued 716 -1,687 -3,394
operations
Impairment loss recognized on the remeasurement to -5,921
fair value and cost to sell
--------------------------------------------------------------------------------
Profit/loss for the period from discontinued -5,205 -1,687 -3,394
operations
The impact of the divestment of the Flexibles
business on the Group´s financial position
Tangible and intangible assets 17,942
Non-current receivables 1,511
Inventories 7,340
Trade receivables and other current receivables 9,004
Cash at bank and in hand 997
---------------------------------------------------------------
Total 36,794
Non-current liabilities 4,642
Trade payables and other current liabilities 10,157
---------------------------------------------------------------
---------------------------------------------------------------
Total 14,799
Total net assets sold 21,995
Cash consideration 5,733
Cash equivalents held by discontinued operations -997
---------------------------------------------------------------
---------------------------------------------------------------
Net cash flow 4,736
Cash flow from discontinued operations
Cash flow from operations 774
Cash flow from investing activities -376
Cash flow from financing -1,800
---------------------------------------------------------------
---------------------------------------------------------------
Change in cash and cash equivalents -1,402
NET SALES BY MARKET AREA
EUR 1,000 Q1-Q3/2014 Q1-Q3/2013 Q1-Q4/2013
-----------------------------------------------------------
-----------------------------------------------------------
Finland 1,942 1,734 2,292
Europe, other 101,678 106,960 138,020
North and South America 185,447 168,964 224,132
Other countries 7,917 6,189 9,240
-----------------------------------------------------------
-----------------------------------------------------------
Net sales, total 296,984 283,847 373,684
QUARTERLY FIGURES
EUR 1,000 Q4/2013 Q1/2014 Q2/2014 Q3/2014 Q4/2013
-
Q3/2014
--------------------------------------------------------------------------------
Net sales 89,837 98,353 95,340 103,291 386,821
Operating profit before 4,176 6,384 5,524 8,710 24,792
non-recurring items
% of net sales 4.6 6.5 5.8 8.4 6.4
Non-recurring items -482 -233 -278 -349 -1,342
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit, total 3,694 6,151 5,246 8,361 23,450
% of net sales 4.1 6.3 5.5 8.1 6.1
Net financial expenses -1,096 -1,467 -1,276 -4,334 -8,173
--------------------------------------------------------------------------------
Profit before income taxes 2,598 4,684 3,970 4,027 15,277
TAXES FOR THE PERIOD UNDER REVIEW
Income tax expense is calculated by country, on the basis of taxable results
and income tax rates.
INFORMATION ON RELATED PARTIES
Suominen has related party relationships with the members of the Board of
Directors, and the members of the Corporate Executive Team, and Ahlstrom
Corporation, including its subsidiaries and associated companies. The company
has no associated companies. Salaries paid to the related parties amounted to
EUR 1,470 thousand, obligatory pension payments EUR 113 thousand, voluntary
pension payments EUR 59 thousand and share-based payments EUR 53 thousand.
Other related-party transactions
EUR 1,000 1-9/2014 1-9/2013 1-12/2013
--------------------------------------------------------------
--------------------------------------------------------------
Sales of goods and services 4,657 13,583 16,439
Purchases of goods and services 56,142 52,388 62,342
Trade and other receivables 865 1,587 1,396
Trade and other payables 8,552 1,383 2,073
Other related-party transactions are transactions with Ahlstrom Corporation and
its subsidiaries and associated companies.
CHANGES IN BORROWINGS
EUR 1,000 Q1-Q3/201 Q1-Q3/201 Q1-Q4/201
4 3 3
--------------------------------------------------------------------------------
---------------------
Total borrowings on 1 January 94,471 111,518 111,518
Current loans from financial institutions on 1 24,071 20,571 20,571
January
Discontinued operations -502
Change in current loans from financial -20,202 3,499 3,500
institutions
--------------------------------------------------------------------------------
---------------------
Current loans from financial institutions on 30 3,367 24,071 24,071
Sep
Non-current loans on 1 January 70,399 90,027 90,027
Discontinued operations -4,283
Change in non-current loans -59,449 -14,763 -19,628
--------------------------------------------------------------------------------
---------------------
Non-current loans on 30 Sep 6,667 75,264 70,399
Debentures on 1 January
Change in debentures 75,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Debentures on 30 Sep 75,000 0 0
Capital loans on 1 January 920 920
Change in capital loans -920 -920
--------------------------------------------------------------------------------
---------------------
Capital loans on 30 Sep 0 0 0
Total borrowings on 30 Sep 85,034 99,335 94,471
CHANGES IN FIXED ASSETS
Q1-Q3/2 Q1-Q3/2 Q1-Q4/2
014 013 013
EUR 1,000 Tangibl Intangi Tangibl Intangi Tangibl Intangi
e ble e ble e ble
--------------------------------------------------------------------------------
-----------------
Book value at the 98,640 12,025 118,019 12,529 118,019 12,529
beginning of the period
Investments 2,567 1,856 1,773 673 3,662 1,004
Decreases -18 -18
Discontinued operations -18,484 -179 -5,365 -115 -5,365 -115
Business combinations 10,463 20
Depreciation -10,071 -1,363 -11,298 -1,153 -15,000 -1,545
Translation differences 5,438 75 -1,757 -448 -2,658 152
and other changes
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Book value at the end of 88,553 12,434 101,355 11,486 98,640 12,025
the period
CONTINGENT LIABILITIES
EUR 1,000 Q1-Q3/2014 Q1-Q3/2013 Q1-Q4/2013
-----------------------------------------------------------------------------
-----------
For own debt
Secured loans 85,000 95,982 91,345
Guarantee commitments
Absolute guarantees 85,000
Guarantees on other own commitments 1,593
Guarantees on behalf of third parties 4,669 1,433
Nominal values of pledges
Real estate mortgages 27,039 27,042
Floating charges 173,201 165,761
Pledged subsidiary shares and loans 192,287 189,699
Other own commitments
Operating leases, real estates 21,918 21,768 22,672
Operating leases, machinery and equipment 1,386 2,495 2,373
FINANCIAL ASSETS BY CATEGORY
a. Financial assets at fair value through profit or loss
b. Held-to-maturity investments
c. Loans and receivables
d. Available-for-sale financial assets
e. Book value
f. Fair value
Classes by instruments' nature
EUR 1,000 a. b. c. d. e. f.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Available-for-sale financial assets 942 942 942
Held-to-maturity investments 449 449 449
Other non-current receivables 980 980 980
Loan receivables 8,591 8,591 8,591
Trade receivables 50,639 50,639 50,639
Other current receivables 300 300 300
Cash and cash equivalents 31,778 31,778 31,778
--------------------------------------------------------------------------
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Total at 30 Sep 2014 980 449 91,307 942 93,678 93,678
Classes by instruments' nature
EUR 1,000 a. b. c. d. e. f.
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Available-for-sale financial assets 939 939 939
Held-to-maturity investments 451 451 451
Other non-current receivables 511 511 511
Loan receivables 131 131 131
Trade receivables 46,908 46,908 46,908
Other current receivables 58 371 429 429
Cash and cash equivalents 18,585 18,585 18,585
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Total at 31 Dec 2013 569 451 65,996 939 67,954 67,954
Principles in estimating fair value for financial assets for 2014 are the same
as those used for preparing the financial statements for 2013.
FINANCIAL LIABILITIES
30 Sep 2014 31 Dec 2013
EUR 1,000 Book Fair Book Fair
value value value value
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Non-current
Loans from financial institutions 6,667 6,667 69,828 69,144
Pension loans 571 577
Debentures 75,000 74,993
Other non-current liablities 710 710
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Total 82,377 82,369 70,399 69,721
Current *)
Repayment of non-current liabilities
Loans from financial institutions 3,333 3,333 23,414 23,412
Pension loans 571 594
Financial leasing 34 34 86 86
Derivatives not held for hedge accounting 94 94
Derivatives held for hedge accounting 83 83 1,354 1,354
Other current liabilities 386 386
Trade payables 43,465 43,465 45,016 45,016
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Total 47,301 47,301 70,535 70,556
Total 129,678 129,670 140,934 140,277
*) In the balance sheet under current liabilities.
Principles in estimating fair value for financial liabilities for 2014 are the
same as those used for preparing the financial statements for 2013.
FAIR VALUE MEASUREMENT HIERARCHY
EUR 1,000 Level 1 Level 2 Level 3
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Assets measured at fair value
Assets held for sale 942
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Total 942
Derivatives measured at fair value
Currency forward deals -717
Electricity derivatives -83
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Total -800
Interest rate swaps were reversed at the refinancing arrangements.
Principles in estimating fair value for financial assets and their hierarchies
for 2014 are the same as those used for preparing the financial statements for
2013.
ANALYST AND PRESS CONFERENCE
Nina Kopola, President & CEO, and Tapio Engström, CFO, will present Suominen's
January-September 2014 financial result in Finnish at an analyst and press
conference in Helsinki today, on Friday 24 October 2014 at 10:00am (EEST). The
conference will take place at Event House Bank, Unioninkatu 20, Helsinki. The
presentation material will be available after the event at www.suominen.fi. NEXT INTERIM REPORT
Suominen Corporation will publish its Financial Statement Release for 2014 on
Friday, 30 January 2015.
Helsinki, 24 October 2014
SUOMINEN CORPORATION
Board of Directors
For additional information, please contact:
Nina Kopola, President & CEO, tel. +358 (0)10 214 300
Tapio Engström, Senior Vice President and CFO, tel. +358 (0)10 214 300
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.suominen.fi
Suominen in brief
Suominen manufactures nonwovens as roll goods for wipes as well as for medical
and hygiene products. The end products made of Suominen's nonwovens - wet
wipes, feminine care products and swabs, for instance - bring added value to
the daily life of consumers worldwide. Suominen is the global market leader in
nonwovens for wipes and employs approximately 600 people in Europe and in the
Americas. Suominen's net sales in 2013 amounted to MEUR 373.7 and operating
profit excluding non-recurring items to MEUR 19.4 (continuing operations). The
Suominen share (SUY1V) is listed in NASDAQ OMX Helsinki Stock Exchange. Read
more at www.suominen.fi.
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