2011-02-11 11:15:00 CET
2011-02-11 11:15:05 CET
REGULATED INFORMATION
Suominen Yhtymä - Financial Statement Release
SUOMINEN CORPORATION FINANCIAL STATEMENT RELEASE 11 JANUARY 2011 AT 12.15 A.M.
UNPROFITABLE YEAR
Tampere, 2011-02-11 11:15 CET (GLOBE NEWSWIRE) -- SUOMINEN CORPORATION
FINANCIAL STATEMENT RELEASE 11 JANUARY 2011 AT 12.15 A.M.
FINANCIAL STATEMENT RELEASE 1 JANUARY - 31 DECEMBER 2010
UNPROFITABLE YEAR
KEY FIGURES 10-12/2010 10-12/200 1-12/2010 1-12/2009
9
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Net sales, EUR million 45.3 44.9 173.4 179.4
Operating profit, EUR million -8.7 0.6 -10.8 6.7
Profit/loss for the period, EUR -10.3 -0.3 -14.4 0.9
million
Earnings/share, EUR -0.22 -0.01 -0.34 0.02
Cash flow from operations/share, -0.05 0.05 -0.06 0.74
EUR
Suominen's net sales in 2010 declined by 3 per cent compared with the previous
year and totalled EUR 173.4 million. Operating profit before non-recurring
costs and a write-down of goodwill was EUR -3.8 million (7.3) and after these
deductions EUR -10.8 million (6.7). The result after taxes was a loss of EUR
14.4 million (+0.9). The write-down of goodwill amounted to EUR 4.9 million and
non-recurring costs arising from restructuring were EUR 2.2 million (0.6). In
the face of an extremely tight competitive situation gross margins fell. The
result also deteriorated as a consequence of lower production volumes and a
rise in raw material prices.
During the financial year, Suominen raised its equity by issuing a rights
offering of EUR 10 million and arranged refinancing by signing an agreement on
a credit facility in the amount of EUR 44 million.
Earnings per share were EUR -0.34 (0.02). Cash flow from operations was EUR
-0.06 per share. The Board of Directors proposes that no dividend be paid for
the financial year 2010.
GROUP FINANCIAL RESULTS
Suominen Corporation generated net sales of EUR 45.3 million (44.9) in the
fourth quarter. Operating profit before non-recurring costs and a write-down of
goodwill was EUR -1.6 million (0.6) and after these deductions EUR -8.6 million
(0.6). Loss before taxes was EUR 10.3 million (0.4).
Net sales for the whole year totalled EUR 173.4 million (179.4). Operating loss
was EUR 10.8 million (profit 6.7), loss before taxes EUR 15.7 million (profit
1.0) and loss after taxes EUR 14.4 million (profit 0.9). Net sales declined by
3 per cent compared to the previous year. The decline was due to lower
production volumes.The rise in raw material prices, which constitute Suominen's
most significant costs, continued until the end of summer, but levelled off
temporarily thereafter. However, some raw material prices resumed their upward
trend at year end. During the year, the prices of plastic-based raw materials
rose by 27-35 per cent. The rise in raw material prices had a considerable
negative impact on the Group's result, the costs of materials and supplies
increasing by 10 per cent on the comparison year. In the majority of current
sales contracts sales prices are adjusted in line with rises in raw material
costs, but to a significant extent the adjustments only take effect several
months after the costs have risen. Operating expenses decreased. In early 2010,
Flexibles stopped production of bags on the roll at the Tampere plant, and at
the end of the year, measures were initiated to close down the Nastola plant.
In the Netherlands, employee negotiations were started to reorganise operations
and reduce personnel.
Further measures were taken to improve the efficiency of the use of assets. The
amount of working capital remained at the previous year's level, despite the
rise in unit prices. Investments were limited to measures that improve
efficiency. Cash flow from operations was EUR ‑2.5 million (26.8).
Cost-saving and operational enhancement programme
The Stairs to Top programme was continued. During the year under review,
savings were generated in personnel and overhead expenses. Production
efficiency per employee continued to improve, although the production volume
targets were not met. The cost savings and efficiency-enhancement measures
generated EUR 3 million (7). Sales programmes focused on strengthening
established customer relationships.
Financing
The Group's interest-bearing net liabilities totalled EUR 57.9 million (59.1),
including capital loans of EUR 6.0 million (8.0). Repayments of non-current
loans were EUR 23.7 million, while the amount of draw-down of new non-current
loans was EUR 8.0 million and current loans EUR 15.0 million. Net financial
expenses were EUR 4.8 million (5.7), or 2.8 per cent (3.2) of net sales.
In June, Suominen issued a share offering of EUR 10 million giving existing
shareholders a pre-emptive right to subscribe for the shares. The proceeds were
used for strengthening the balance sheet and creating better conditions for
structural changes in the company. The record date of the issue was 4 June and
the final payment date was 30 June.
In December, Suominen made an agreement on a credit facility in the amount of
EUR 44 million, which includes a three-year amortising loan and a revolving
credit facility effective for two years. The credit terms were eased as regards
covenants on debt service. On the other hand, the interest rate margin is
performance-based, the agreement includes a minimum liquidity requirement and
the security arrangements are more comprehensive. Suominen intends to reduce
its net debt by selling, where possible, balance sheet items that are less
important to the company's future operations. In the credit agreement, the
first instalment of EUR 15 million is scheduled for June 2011.
The change in working capital in the cash flow statement was EUR -1.1 million
(15.2). At year end, a total of EUR 14.0 million (10.5) in trade receivables
was sold to the bank. The equity ratio was 27.9 per cent (29.9). When capital
loans are included in shareholders' equity, the equity ratio was 32.9 per cent
(36.4) and the ratio of liabilities to shareholders' equity 132.1 per cent
(114.4). Cash flow from operations was EUR -0.06 per share (0.74).
Investments
The Company's gross investments in production totalled EUR 6.2 million (4.5).
Planned depreciation amounted to EUR 9.3 million (10.2). Codi Wipes accounted
for EUR 0.6 million (1.0), Nonwovens for EUR 1.7 million (1.5) and Flexibles
for EUR 3.8 million (2.0) of total investments. Flexibles invested in a new
printing machine in Poland. Other Group investments were in
efficiency-enhancement and maintenance.
SEGMENT RESULTS
In 2010, net sales of the Wiping business area totalled EUR 108.2 million, a
decline of 5 per cent on the previous year. The business area's operating
profit before non-recurring costs and a write-down of goodwill was EUR ‑2.7
million and after the deductions EUR -8.6 million. In December, the business
area's management was changed, the President and CEO of Suominen Corporation
taking over the responsibility for the business area in addition to his other
duties.
Net sales of Codi Wipes, at EUR 56.4 million, declined by 13 per cent on the
previous year. The decline was due to a fall in sales prices at the beginning
of the year and lower production volumes compared to the reference year. Sales
declined in the baby wipes and moist toilet wipes segment, while sales of
personal care wipes increased. In autumn, the unit launched several new
products in collaboration with major customers. The unit's operating expenses
decreased. In December, employee negotiations were started with a view to
rationalising the organisation and reducing personnel by approximately 20
employees. An agreement was reached in January 2011. In the financial
statements, a provision of EUR 1.0 million was recorded for lay-off and other
costs due to the rationalisation measures.
Net sales of Nonwovens increased by 4 per cent to EUR 59.1 million. Sales of
thermobonded hygiene product material fell to less than half of the previous
year's level. Volumes of hydroentangled nonwovens grew, and sales in the USA
and Russia increased. Likewise, sales of health care materials increased.
Prices of plastic raw materials and viscose rose by a clear margin during the
year. Due to the tight competitive situation, it was extremely difficult to
implement sales price increases. For customers having price escalators in sales
contracts, cost rises were passed on to sales prices with a delay of some
months. Product development focused on launching new light-weight nonwovens. In
spite of cost saving measures, the unit's costs rose due to the increased
energy, electricity and transportation costs. During the spring, a couple of
short production lay-offs were implemented. The goodwill of the Nonwovens
cash-generating unit was decided to write down in the company's 2010 financial
statements.
Net sales of the Flexibles business area totalled EUR 66.1 million (66.9), and
operating profit was EUR -2.1 million (2.8), including non-recurring costs of
EUR 1.2 million from operational reorganisation. Net sales declined by 1 per
cent, mainly due to a fall-off in sales of retail carrier bags. The production
of fruit and vegetable bags on the roll was terminated at the beginning of
2010. The sales figures for hygiene and food packaging as well as for security
and system packaging remained on a level with the reference year. Sales of
tissue and bakery packaging as well as labels increased. Regionally, sales
developed positively in Russia in particular. Of new products, differentiating
material solutions and thermo bags played a role in the increase of sales.
The costs of raw material used by Flexibles increased considerably, especially
during the first half of the year, and it was not possible to transfer these
increases to sales prices soon enough. For this reason, the proportion of raw
materials of all costs rose clearly compared with the reference year. The
business area's operating expenses fell due to the decision made in the
previous year to transfer production from Sweden to Poland. In the autumn, a
decision was made to end production at the Nastola plant and redistribute
production between plants. The related transfers of machinery from Nastola to
Poland and Tampere were started at the end of the year, though mainly scheduled
for the first half of 2011. Following employee negotiations, 102 employment
contracts were terminated at Finnish plants, while the headcount at the Polish
plant will increase by 40 people as production volumes increase.
GENERAL MEETINGS OF SHAREHOLDERS
The Annual General Meeting of Shareholders was held on 23 March 2010. The
General Meeting decided that a dividend of EUR 0.02 would be paid for 2009.
The General Meeting approved the financial statements of the parent company and
the Group for the financial year 1 January - 31 December 2009 and released the
members of the Board of Directors and the President and CEO from liability for
the period. Heikki Bergholm, Kai Hannus, Suvi Hintsanen, Juhani Lassila, Mikko
Maijala, and Heikki Mairinoja were elected to the Board of Directors. At its
organising meeting, the Board elected Mikko Maijala as Chairman and Heikki
Mairinoja as Deputy Chairman. PricewaterhouseCoopers Oy, Authorised Public
Accountants, with Heikki Lassila, APA, as the principal auditor, were elected
as auditors of Suominen Corporation.
An Extraordinary General Meeting of Shareholders was held on 1 June 2010. The
General Meeting authorised the Board of Directors to decide on the issue of a
maximum of 30,000,000 new shares in one or more share issues against payment.
Amendments to the Articles of Association
The Annual General Meeting of Shareholders held on 23 March 2010 adopted an
amendment to the Articles of Association resulting from an amendment to the
Limited Liability Companies Act, which entered into force on 31 December 2009.
Article 11 of the company's Articles of Association was amended so as to
stipulate that the invitation to the General Meeting of Shareholders shall be
published no later than three weeks prior to the General Meeting, however, at
least nine days before the General Meeting record date.
SHARE CAPITAL AND SHARES
Share capital and share issue
On 1 January 2010, the registered number of issued shares of Suominen totalled
23,720,112 shares. The fully paid up share capital amounted to EUR 11,860,056.
Based on the authorisation given by the Extraordinary General Meeting held on 1
June 2010, the company's Board of Directors decided to raise the share capital
through a share issue implemented from 9 to 23 June 2010. On 30 June 2010, the
company announced that the final outcome of the rights offering showed that a
total of 23,108,629 shares, representing 97.6 per cent of the total number of
shares offered, had been subscribed for on the basis of subscription rights.
The remaining 566,273 shares had been subscribed for without subscription
rights. The subscription price was EUR 0.43 per share.
Trading in interim shares commenced on 24 June 2010. Shares subscribed for in
the rights offering were registered with the Finnish Trade Register on 1 July
2010, after which they were combined with the company's existing shares.
Trading in the new shares alongside the existing shares commenced on NASDAQ OMX
Helsinki Ltd on 2 July 2010. The new shares include the right to dividends and
other distributions as well as other shareholder rights as from the
registration date of 1 July 2010.
Following the registration of 1 July 2010, the registered number of Suominen's
issued shares totals 47,395,014 shares.
Share trading and price
The number of Suominen Corporation shares traded on NASDAQ OMX Helsinki before
the share issue, from 1 January to 30 June 2010, was 2,575,585 shares,
including the interim shares representing the offer shares subscribed for on
the basis of the subscription rights. The trading price of the company's
ordinary shares varied between EUR 1.41 and EUR 1.74 before the new rights
issue (4 June 2010) and from EUR 0.74 to EUR 1.39 thereafter. The final trading
price on 30 June was EUR 0.75. The trading price of the interim share varied
between EUR 0.71 and EUR 0.75. The final trading price was EUR 0.73. The
highest price for subscription rights on NASDAQ OMX Helsinki was EUR 0.50, and
the lowest price was EUR 0.23. The final price was EUR 0.24. The total number
of subscription rights traded was 2.1 million, with a total value of EUR 0.6
million.
The number of Suominen Corporation shares traded on NASDAQ OMX Helsinki after
the share issue, from 1 July to 31 December 2010, was 3,501,425 shares. The
trading price varied between EUR 0.48 and EUR 0.79. The final trading price was
EUR 0.52, giving the company a market capitalisation of EUR 24,557,629 million
on 31 December 2010.
The Company's own shares
On 1 January 2010, the company held 682 of its own shares, accounting for 0.0
per cent of the share capital and votes.
The 2009 Annual General Meeting of Shareholders authorised the Board of
Directors to acquire a maximum of 200,000 of the company's own shares. This
authorisation was still valid and the company acquired 76,405 of its own shares
during the period from 1 January to 30 June 2010. The same General Meeting also
granted an authorisation to convey the company's own shares, and the Board of
Directors still had authorisation to convey 200,682 of these shares. Within the
authorisation, the company has conveyed 31,877 of its own shares as emoluments
to the Board of Directors in the period under review. The price of the conveyed
shares was EUR 1.60 per share.
The Annual General Meeting of Shareholders held on 23 March 2010 authorised the
Board of Directors to decide on the acquisition of a maximum of 200,000 of the
company's own shares. The General Meeting also authorised the Board of
Directors to decide on the conveyance of a maximum of 200,682 of the company's
own shares. During the period under review, the Board of Directors has not
exercised these authorities granted by the 2010 Annual General Meeting.
On 31 December 2010, Suominen Corporation held a total of 168,805 of its own
shares, accounting for 0.36 per cent of the share capital and votes.
Stock options
Suominen has stock option plans 2006, 2007 and 2009. The Board of Directors has
decided to amend the terms and conditions of the option plans so that an option
holder has the right to the same proportion of shares in the company as before
the rights offering. The subscription prices per share were also adjusted.
The 2006A and 2006B stock options have expired. A total of 100,000 2006C stock
options has been granted at the original subscription price of EUR 1.66. The
new number of shares that can be subscribed under the stock option plan is
200,000, and the new subscription price is EUR 1.05. The subscription period
for the 2006C stock options is from 2 May 2010 to 30 October 2011.
The 2007A stock options have expired. A total of 90,000 2007B stock options has
been granted at the original subscription price of EUR 1.66. The new number of
shares that can be subscribed under the stock option plan is 180,000, and the
new subscription price is EUR 1.05. A total of 60,000 have been returned to the
company, i.e. the option right holders still have 120,000 shares. The
subscription period for the 2007B stock options is from 2 May 2010 to 30
October 2011.
A total of 150,000 2009A stock options has been granted at the original
subscription price of EUR 1.46. The new number of shares that can be subscribed
under the stock option plan is 300,000, and the new subscription price is EUR
0.95. A total of 50,000 of these have been returned to the company, i.e. the
option right holders still have 250,000 shares. The subscription period for the
2009A stock options is from 2 May 2011 to 30 October 2012.
A total of 300,000 2009B stock options has been granted after the share issue
at a subscription price of EUR 0.96. The number of shares that can be
subscribed under the stock option plan is 300,000. The subscription period for
the 2009B stock options is from 2 May 2012 to 30 October 2013.
While the registered number of Suominen's issued shares totals 47,395,014, the
number of shares may rise to a maximum of 48,265,014 after stock option
subscriptions.
Other authorisation for the Board of Directors
The Board of Directors still has authorisation to issue 300,000 more stock
options in accordance with the 2009 stock option plan, which would entitle
holders to subscribe for 300,000 Suominen shares. The validity of the
authorisation to issue 6,325,098 new shares remaining from the authorisation
granted by the Extraordinary General Meeting held on 1 June 2010 expired on 31
December 2010, after which the Board of Directors is not otherwise authorised
to issue special rights entitling to shares, option rights and/or convertible
bonds.
BUSINESS RISKS AND UNCERTAINTIES
Developments and changes in European consumer demand govern the demand for
Suominen's products. Changes in the economic situation also play a role in
affecting consumer behaviour, and there is a risk that consumers will alter
their purchasing habits. The deterioration in the general economic situation
has in fact affected purchasing habits in that consumers are increasingly
buying more affordable products and the private label goods of retail chains.
Suominen's customer base is fairly narrow, which adds to the customer-specific
risk. This may affect Suominen's business operations if customers' purchasing
habits become more cautious as a result of a general fall in consumption, or if
net sales are negative. The Group's ten largest customers currently account for
64 per cent of its net sales (63), long-term contracts being preferred in the
case of the largest customers. The loss of one or more significant customer, a
considerable reduction in the volume of key customers' purchases, or financial
or business difficulties may have adverse effects on Suominen's business
operations. Customer-related credit risks are managed in accordance with a risk
policy approved by the Board of Directors. Credit limits are confirmed for
customers on the basis of credit ratings and customer history. Suominen also
uses export credit guarantees to cover the company against credit losses in
export trade.
Plastic-based products suffer from a poor image in certain applications, which
may increase the risk of lower demand for some products. However, it is
difficult to find alternatives for the products in Suominen's range.
New-technology products and imports from low-cost countries may reduce the
competitiveness of Suominen's products. These risks are mitigated, however, by
the quality requirements expected of many products, which existing cheaper
offerings are incapable of meeting, and by the challenges associated with
transport and distribution.
Suominen does not have any competitors with a fully similar product offering.
However, the company has numerous regional, national or international
competitors in its different product groups. Supply exceeds demand in most of
the product groups. If Suominen Corporation is not able to compete with 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.
Suominen uses certain technologies in its production. In the company
management's view, the chosen technologies are competitive and there is no need
to make major investments in new technologies. However, it cannot be excluded
that the company's technology choices could prove wrong, and the development of
new or substitute technologies would then require investments.
Extended interruptions in supplies 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. Annually the
Group purchases considerable amounts of oil-based and wood-based raw materials,
the value of which totalled approximately EUR 55 million in 2010. The prices of
the oil-based raw materials used by Suominen are largely determined on the
international commodities market, which makes it difficult to forecast how they
will develop. Raw material price changes have a rapid effect on Suominen's
financial performance, as stocks equal 2 to 4 weeks consumption. Passing on
price changes in these materials to the prices Suominen charges its contract
customers takes between three to six months.
Suominen aims to protect its business against product liability risks through
the use of systematic quality assurance processes and product liability
insurance. R&D is responsible for ensuring the underlying safety of the Group's
products during their development. Ongoing quality control is designed to
guarantee product quality during production. Management considers it unlikely
that the Group will face significant product liability-related claims, and is
unaware of any such claims.
There could be a risk of Suominen's business operations being interrupted due
to abrupt and unforeseen events, such as power outages or fire and water
damage. Suominen Corporation may not be able to control these events through
predictive actions, which could lead to interruptions in business. Managing
damage risk forms part of the operational management of the Group's units.
Risks of this type are insured in order to guarantee the continuity of
operations. An insurance policy approved by the Board of Directors regulates
the Group's insurance activities. An external insurance broker is used to
identify and manage Suominen's insurance cover. The policies are normal
property, loss of profit and liability insurance policies, taken out with
reputable insurance companies.
Suominen Corporation is subject to income taxes in numerous jurisdictions.
Significant judgement is required to determine the total amount of income tax
at Group level. There are many transactions and calculations that leave room
for uncertainty as to the final amount of tax. Taxation risks also relate to
changes in tax rates or tax legislation, or misinterpretations, and
materialisation of the risk could result in increased payments or sanctions by
the tax authorities, which in turn could lead to financial loss. Deferred tax
assets included in the balance sheet require that the deferred tax assets can
be recovered in future taxable income.
The Group's financial risks are managed in accordance with a policy approved by
the Board of Directors. Financial risks relate to the adequacy of funding,
credit risks, and the market risks associated with financial instruments,
divided into currency, interest rate, and commodity risks. In December Suominen
made an agreement on a credit facility in the amount of EUR 44 million, and the
company will have to meet the repayment and other terms and conditions. The
first instalment of EUR 15 million will fall due at the end of June 2011, which
calls for good income from operations, streamlining the balance sheet or
strengthened equity. Suominen has launched several initiatives in order to
release capital, but in the general financial situation it is uncertain whether
the initiatives can be carried out according to the required schedule. If
Suominen is unable to pay the agreed instalment, the company will have to seek
refinancing from the current financiers under potentially tighter terms and
conditions. Suominen's credit arrangements include covenants that the company
must meet. The covenants require the Group to have financial buffers worth a
minimum of EUR 2 million. The Group's equity ratio must be 27 %, with capital
loans included in equity. Should Suominen default on its obligations, the banks
have the right to declare the loans due and payable and to renegotiate the
terms. According to Suominen's estimates, this would lead at least to increased
financing costs resulting from the banks' upfront fees and higher interest rate
margins.
Goodwill is tested annually to determine whether there is any impairment. The
test calculations require forecasts and actual cash flows may deviate from the
forecast future discounted cash flows, as the long economic life-time of our
non-current assets, changes in the estimated product prices, production costs,
and in interest rates used in discounting may result in significant
write-downs. Impairment test calculations are based on present estimates of
future developments. The value in use of Codi Wipes exceeds the carrying amount
by EUR 2.9 million. This goodwill value is based on the acquisition of Codi
Wipes.
OUTLOOK
The demand for Suominen's products is evaluated on the basis of customer
contracts and use forecasts provided by customers. It is estimated that the
demand for Suominen's products will remain stable in 2011, and no major change
is anticipated in the net sales for 2011 over the 2010 level.
Suominen has initiated measures to raise product prices with the aim of
improving sales margins. On the other hand, the prices of raw materials are
still rising. Sales volumes and margins early in the year are not expected to
change substantially from the level in autumn 2010. It is estimated that the
result after taxes for the total year 2011 will improve over 2010 but remain
negative.
PROPOSAL BY THE BOARD OF DIRECTORS
The parent company's distributable assets as of the end of 2010 totalled EUR
7,965,886.79 of which the loss for the year was EUR 10,917,305.73.
The Board of Directors will propose at the Annual General Meeting to be held on
30 March 2011 that these funds be distributed as follows:
No dividend be paid for the financial year, EUR 0.00
Leaving on the retained earnings 7,965,886.79
account, EUR
SUOMINEN CORPORATION CONSOLIDATED 1 JANUARY - 31 DECEMBER 2010
This financial statement has been prepared in compliance with IAS 34 Interim
Financial Reporting. Changes to published accounting standards and
interpretations, together with the new accounting standards that came into
force on 1 January 2010, are presented in the financial statements for 2009.
All calculations in the financial statements have been prepared in compliance
with IAS 1, ‘Presentation of Financial Statements'. This revised standard is
aimed at improving users' ability to analyse and compare the information given
in financial statements by separating changes in the equity of an entity
arising from transactions with owners from other changes in equity. Non-owner
changes in equity will be presented in the statement of comprehensive income.
In its principles for preparing the financial statements, Suominen has not
applied any changes allowed by the published new standards and interpretations
prior to their official introduction. The accounting principles are consistent
in other respects with those of the annual financial statements for 2009.
The figures in this financial statement have not been audited.
BALANCE SHEET
EUR 1 000 12/2010 12/2009
---------------------------------------------------------------------
Assets
Non-current assets
Goodwill 18 498 23 404
Intangible assets 776 795
Tangible non-current assets 53 873 57 044
Available-for-sale financial assets 212 212
Held-to-maturity investments 354 225
Deferred tax assets 1 339 921
---------------------------------------------------------------------
Non-current assets, total 75 052 82 601
Current assets
Inventories 24 373 22 598
Trade receivables 10 817 11 514
Other current receivables 5 666 4 416
Income tax receivables 200 112
Cash at bank and in hand 3 253 1 589
---------------------------------------------------------------------
Current assets, total 44 309 40 229
Assets, total 119 361 122 830
Shareholders' equity and liabilities
Equity attributable to owners of the parent company
Share capital 11 860 11 860
Share premium account 24 681 24 681
Invested non-restricted equity fund 9 708
Fair value and other reserves 665 -402
Translation differences 515 -117
Other shareholders' equity -14 143 667
---------------------------------------------------------------------
Shareholders' equity, total 33 286 36 689
Liabilities
Non-current liabilities
Deferred tax liabilities 2 930 3 065
Provisions 280 280
Capital loans 4 000 6 000
Interest-bearing liabilities 35 823 43 390
---------------------------------------------------------------------
Non-current liabilities, total 43 033 52 735
---------------------------------------------------------------------
Current liabilities
Interest-bearing liabilities 19 459 9 471
Capital loans 2 000 2 000
Income tax liabilities 39
Trade payables and other current liabilities 21 583 21 896
---------------------------------------------------------------------
Current liabilities, total 43 042 33 406
Liabilities, total 86 075 86 141
Shareholders' equity and liabilities, total 119 361 122 830
STATEMENT OF INCOME
EUR 1 000 10-12/2010 10-12/200 1-12/2010 1-12/2009
9
--------------------------------------------------------------------------------
Net sales 45 315 44 855 173 438 179 354
Cost of goods sold -43 399 -40 320 -165 277 -158 969
--------------------------------------------------------------------------------
Gross profit 1 916 4 535 8 161 20 385
Other operating income 147 124 859 530
Sales and marketing expenses -1 120 -1 085 -3 927 -3 715
Research and development -567 -684 -1 951 -2 297
Administration expenses -1 721 -1 701 -6 333 -7 144
Other operating expenses -2 244 -584 -2 564 -1 053
--------------------------------------------------------------------------------
Operating profit before impairment -3 589 606 -5 755 6 706
losses
Impairment losses -5 069 -5 069
--------------------------------------------------------------------------------
Operating profit -8 658 606 -10 824 6 706
Financial income and expenses -1 686 -1 045 -4 840 -5 701
--------------------------------------------------------------------------------
Profit before income taxes -10 344 -439 -15 664 1 005
--------------------------------------------------------------------------------
Income taxes 8 91 1 302 -145
--------------------------------------------------------------------------------
Profit/loss for the period -10 336 -348 -14 362 860
Earnings/share, EUR -0.22 -0.01 -0.34 0.02
STATEMENT OF COMPREHENSIVE INCOME
EUR 1 000 10-12/201 10-12/200 1-12/201 1-12/200
0 9 0 9
--------------------------------------------------------------------------------
Profit/loss for the period -10 336 -348 -14 362 860
Other comprehensive income
Total exchange differences on foreign 355 306 854 335
operations
Fair value changes of cash flow hedges 912 428 1 661 48
Fair value changes of 73
available-for-sale assets
Other reclassifications -5 72 -2 -9
Income tax on other comprehensive -330 -191 -654 -119
income
--------------------------------------------------------------------------------
Other comprehensive income, total 932 615 1 859 328
--------------------------------------------------------------------------------
Total comprehensive income for the -9 404 267 -12 503 1 188
period
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
EUR 1 Share Share Invested Own Transla Fair Retaine Total
000 capita premium non-restri shares tion value d
l account cted differe reserv earning
equity nces es s
fund
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 11 860 24 681 -1 -117 -401 667 36 689
equity
at
1 Jan.
2010
Profit/l -14 362 -14 362
oss for
the
period
Other 632 1 229 -2 1 859
comprehe
nsive
income
Share-ba 29 29
sed
payments
Share 9 708 9 708
issue
Dividend -474 -474
Repurcha -213 -213
se of
own
shares
Conveyan 51 -1 50
ce of
own
shares
--------------------------------------------------------------------------------
Total 11 860 24 681 9 708 -163 515 828 -14 143 33 286
equity
at
31 Dec.
2010
--------------------------------------------------------------------------------
EUR 1 Share Share Invested Own Translat Fair Retain Total
000 capita premium non-restric shares ion value ed
l account ted equity differen reserv earnin
fund ces es gs
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 11 860 24 681 -50 -365 -490 -246 35 390
equity
at
1 Jan.
2009
Profit/l 860 860
oss for
the
period
Other 248 89 -9 328
comprehe
nsive
income
Share-ba 68 68
sed
payments
Conveyan 49 -6 43
ce of
own
shares
--------------------------------------------------------------------------------
Total 11 860 24 681 -1 -117 -401 667 36 689
equity
at
31 Dec.
2009
--------------------------------------------------------------------------------
CASH FLOW STATEMENT
EUR 1 000 1-12/2010 1-12/2009
-------------------------------------------------------------------
-------------------------------------------------------------------
Operations
Operating profit -10 824 6 706
Total adjustments 14 076 10 367
-------------------------------------------------------------------
Cash flow before change in working capital 3 252 17 073
-------------------------------------------------------------------
Change in working capital -1 054 15 234
Financial items -4 626 -5 263
Taxes paid -31 -251
-------------------------------------------------------------------
Cash flow from operations -2 459 26 793
-------------------------------------------------------------------
Investment payments
Investments in tangible and intangible assets -5 966 -4 373
Proceeds from disposal of fixed assets 751 388
and other proceeds
-------------------------------------------------------------------
Cash flow from investing activities -5 215 -3 985
-------------------------------------------------------------------
Financing
Non-current loans drawn 8 000 35 192
Repayments of non-current loans -23 731 -58 722
Change in commercial papers 988
Repayments of capital loans -2 000 -2 000
Current loans drawn 17 000
Dividends paid -474
Repurchase and conveyance of own shares -163 44
Share issue 9 708
-------------------------------------------------------------------
Cash flow from financing 9 328 -25 486
-------------------------------------------------------------------
Change in cash and cash equivalents 1 654 -2 678
KEY FIGURES 10-12/2010 10-12/200 1-12/2010 1-12/2009
9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, change, % * 1.0 -10.0 -3.3 -16.4
Gross profit, % ** 4.2 10.1 4.7 11.4
Operating profit, % ** -19.1 1.4 -6.2 3.7
Financial income and expenses, % ** -3.7 -2.3 -2.8 -3.2
Profit before income taxes, % ** -22.8 -1.0 -9.0 0.6
Profit for the period, % ** -22.8 -0.8 -8.3 0.5
Earnings/share, EUR -0.22 -0.01 -0.34 0.02
Equity/share, EUR 0.70 1.01
Dividend/share, EUR 0.02
Cash flow from operations/share, -0.06 0.74
EUR
Return on equity (ROE), % -37.3 2.4
Return on invested capital (ROI), % -10.6 6.4
Equity ratio, % 27.9 29.9
Gearing, % 174.0 161.2
Gross investments, EUR 1 000 6 190 4 507
Depreciation, EUR 1 000 9 322 10 158
Impairment losses, EUR 1 000 5 069
* Compared with the corresponding period of the previous year.
** As of net sales.
SEGMENT REPORTING
Wiping
EUR 1 000 1-12/2010 1-12/2009 Change %
-------------------------------------------------------------------------
Net sales
- Codi Wipes 56 371 64 479 -12.6
- Nonwovens 59 084 56 905 3.8
- eliminations -7 296 -7 888 -7.5
Total 108 159 113 496 -4.7
Operating profit before impairment losses -3 699 4 299
% of net sales -3.4 3.8
Impairment losses -4 906
Operating profit -8 605 4 299
Assets 67 650 78 991
Liabilities 11 620 13 349
Net assets 56 030 65 641
Investments 2 278 2 447
Depreciation 6 117 6 784
Impairment losses 4 906
Average personnel 369 392
Flexibles
EUR 1 000 1-12/2010 1-12/2009 Change %
-------------------------------------------------
Net sales 66 140 66 894 -1.1
Operating profit -1 941 2 823
% of net sales -2.9 4.2
Assets 45 950 44 462
Liabilities 10 048 10 039
Net assets 35 902 34 423
Investments 3 788 2 059
Depreciation 3 181 3 349
Impairment losses 163
Average personnel 521 541
Non-allocated items
EUR 1 000 1-12/2010 1-12/2009
---------------------------------------
Net sales -861 -1 036
Operating profit -115 -415
Assets 5 760 -623
Liabilities 64 406 62 752
Investments 124 1
Depreciation 24 24
Average personnel 11 11
NET SALES BY MARKET AREA
EUR 1 000 1-12/2010 1-12/2009
--------------------------------------
Finland 27 053 29 883
Scandinavia 14 821 15 843
The Netherlands 9 915 12 004
Europe, other 104 651 106 220
Other countries 16 998 15 404
--------------------------------------
Net sales, total 173 438 179 354
QUARTERLY FIGURES
EUR 1 000 I/2010 II/201 III/201 IV/2010 I/2010-IV/20
0 0 10
--------------------------------------------------------------------------------
Net sales
Wiping
- Codi Wipes 13 884 14 844 14 210 13 433 56 371
- Nonwovens 12 246 13 722 14 958 18 159 59 084
- eliminations -1 667 -1 333 -1 734 -2 562 -7 296
--------------------------------------------------------------------------------
Total 24 462 27 234 27 434 29 029 108 159
Flexibles 16 395 17 107 16 125 16 513 66 140
Non-allocated items -241 -193 -200 -227 -861
--------------------------------------------------------------------------------
Net sales, total 40 616 44 148 43 359 45 315 173 438
Operating profit
Wiping -142 -787 -1 136 -623 -2 689
% of net sales -0.6 -2.9 -4.1 -2.1 -2.5
Flexibles -135 873 -720 -1 017 -999
% of net sales -0.8 5.1 -4.5 -6.2 -1.5
Non-allocated items -48 -103 33 3 -115
--------------------------------------------------------------------------------
Operating profit before -325 -17 -1 824 -1 637 -3 803
non-recurring costs
% of net sales -0.8 0.0 -4.2 -3.6 -2.2
Non-recurring costs -7 021 -7 021
--------------------------------------------------------------------------------
Operating profit, total -325 -17 -1 824 -8 658 -10 824
--------------------------------------------------------------------------------
% of net sales -0.8 0.0 -4.2 -19.1 -6.2
Net financial expenses -1 138 -988 -1 028 -1 686 -4 840
--------------------------------------------------------------------------------
Profit before income taxes -1 463 -1 005 -2 852 -10 344 -15 664
TAXES FOR THE YEAR UNDER REVIEW
Income taxes are calculated based on the final tax outcome and income tax rate
by country.
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. The company has no
investments in associated companies. Salaries paid to the related parties
amounted to EUR 1,104,000, share-based payments EUR 29,000, unsecured loans EUR
660,000, and interest payments EUR 101,000.
MOVEMENTS IN BORROWINGS
EUR 1 000 1-12/2010 1-12/2009
------------------------------------------------------------------------------
Total borrowings on 1 January 60 861 86 403
Current loans from financial institutions on 1 January
Change in current loans from financial institutions 17 000
------------------------------------------------------------------------------
Current loans from financial institutions on 31 December 17 000 0
Commercial papers on 1 January
Change in commercial papers 988
------------------------------------------------------------------------------
Commercial papers on 31 December 988 0
Non-current loans on 1 January 52 861 76 403
Change in non-current loans -15 577 -23 542
------------------------------------------------------------------------------
Non-current loans on 31 December 37 284 52 861
Capital loans on 1 January 8 000 10 000
Change in capital loans -2 000 -2 000
------------------------------------------------------------------------------
Capital loans on 31 December 6 000 8 000
Total borrowings on 31 December 61 282 60 861
CHANGES IN FIXED ASSETS
1-12/2010 1-12/2009
EUR 1 000 Tangible Intangible Tangible Intangible
--------------------------------------------------------------------------------
Book value at the beginning of the 57 044 795 62 661 855
period
Investments 5 884 177 4 311 143
Decreases -466 -1 -161
Depreciation -9 127 -195 -9 955 -203
Translation differences and other 538 188
changes
--------------------------------------------------------------------------------
Book value at the end of the period 53 873 776 57 044 795
CONTINGENT LIABILITIES
EUR 1 000 12/2010 12/2009
-----------------------------------------------------------
For own debt
Real estate mortgages 24 045 24 045
Floating charges 60 069 50 000
Pledged subsidiary shares 82 982
Other own commitments
Operating leases, real estates 9 465 9 878
Operating leases, machinery and equipment 7 577 8 494
Guarantee commitments 1 995 1 752
NOMINAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS
EUR 1 000 12/2010 12/2009
-------------------------------------------
-------------------------------------------
Currency derivatives
Nominal value 5 172 5 637
Fair value -138 -27
Interest rate derivatives
Nominal value 13 833 25 833
Fair value -143 -448
Electricity derivatives
Nominal value 2 638 1 292
Fair value 1 249 -120
Commodity derivatives
Nominal value 435
Fair value 48
Helsinki, 11 February 2011
SUOMINEN CORPORATION
Board of Directors
For additional information please contact:
Mr. Petri Rolig, President and CEO, tel. +358 (0)10 214 300
Mr. Arto Kiiskinen, Vice President and CFO, tel. +358 (0)10 214 300
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