2017-01-31 11:00:02 CET
2017-01-31 11:00:02 CET
BIRTINGARSKYLDAR UPPLÝSNINGAR
Suominen Oyj - Financial Statement Release
Suominen Corporation’s Financial Statement’s Release for 1 Jan–31 Dec 2016: Net sales and operating profit declined, cash flow from operations grew from the comparison period
Helsinki, Finland, 2017-01-31 11:00 CET (GLOBE NEWSWIRE) -- Suominen
Corporation Financial Statement Release 31 January 2017 at 12:00 noon (EET)
Suominen Corporation’s Financial Statement’s Release for 1 Jan–31 Dec 2016:
Net sales and operating profit declined, cash flow from operations grew from
the comparison period
Key figures
10-12/ 10-12/ 1-12/ 1-12/
2016 2015 2016 2015
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Net sales, EUR million 100.4 104.2 416.9 444.0
Comparable operating profit, EUR million 3.5 4.3 25.6 31.2
Operating profit, EUR million 3.5 4.3 25.6 31.8
Profit for the period, EUR million 1.6 1.9 15.2 17.0
Earnings per share, basic, EUR * 0.03 0.03 0.29 0.32
Earnings per share, diluted, EUR * 0.03 0.03 0.26 0.29
Cash flow from operations per share, EUR * 0.07 0.22 0.56 0.54
Return on invested capital, rolling 12 months, % − − 11.6 15.9
Gearing, % − − 39.6 25.9
Dividend per share, EUR ** − − 0.11 0,10
* Adjusted due to reverse share split.
** Proposal to the Annual General Meeting.
In this Financial Statement Release, the figures shown in brackets refer to the
comparison period last year if not otherwise stated.
Highlights in October–December 2016:
- Net sales decreased by 3.7% and were EUR 100.4 million (104.2).
- Operating profit fell by 16.9% to EUR 3.5 million (4.3).
- The share of product with higher added value in the net sales grew to 62%
(60%).
- The installations of the new manufacturing line were completed in schedule at
the Bethune plant.
- Suominen expects that for the full year 2017, its net sales will improve from
year 2016. Also the comparable operating profit is estimated to improve from
year 2016, provided that the new production line at the Bethune plant will be
started up as planned. In 2016, Suominen’s net sales amounted to EUR 416.9
million and comparable operating profit to EUR 25.6 million. The calculation of
comparable operating profit is explained in the disclosures of this release.
- Suominen’s Board of Directors proposes to the Annual General Meeting EUR 0.11
per share dividend distribution from the financial year 2016. On 31 January
2017 the company had 50,772,555 issued shares, excluding treasury shares. With
this number of shares, the total amount of dividends to be distributed would be
EUR 5,584,981.05.
President & CEO Nina Kopola comments on Suominen’s fourth quarter of 2016 and
the full financial year:
“Consumers’ confidence in their personal financial situation improved in the
last quarter, both in Europe and especially in the US. The consumer confidence
indices closed at a higher level than both the end of 2015 and the third
quarter of 2016. Nonwovens manufactured by Suominen are used mainly in daily
consumer goods, which means the development of demand is affected by both the
general economic situation and consumer confidence. North America and Europe
are Suominen’s main market areas.
Suominen’s financial development in the 2016 financial year did not live up to
our expectations. Due to the tightened competitive situation, it was harder
than usual to predict the development of demand during the year, mostly in baby
wipes in the North American and European markets, and in flushable products in
the European markets. The tightened competitive situation affected sales
volumes and made pricing more challenging. Suominen’s fourth quarter net sales
would have been at the level of the comparison period if the revenue
recognition of larger than usual number of customer deliveries of finished
goods were not postponed into 2017. Now the fourth-quarter net sales declined
3.7 percent to EUR 100.4 million. Net sales for the full financial year shrunk
6.1% and amounted to EUR 416.9 million.
Among the reasons for satisfaction with the 2016 financial year is the
favorable development of the sales mix, which is also a further reflection of
the success of our strategic measures. The share of products with higher added
value in our net sales grew from the comparison period and was 62% (60%). The
continuation of this trend creates the conditions for future net sales and
profitability growth.
Suominen’s comparable fourth-quarter operating profit declined 16.9 percent to
EUR 3.5 million. Comparable operating profit for the full financial year
amounted to EUR 25.6 million, or 6.1% of net sales. Operating profit was
burdened by lower sales volumes and pricing pressure caused by tightened
competition. Our ongoing efforts to improve our strategic capabilities, for
instance in product development resources, in the Bethune production line
investment, and in the current ICT system overhaul, increased our costs last
year.
Cash flow from operations continued to be strong, at EUR 28.5 million (27.3).
Fourth quarter profit amounted to EUR 1.6 million, and profit for the full
financial year was EUR 15.2 million. Earnings per share in 2016 were EUR 0.29.
Suominen’s Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.11 (0.10) per share be paid for the financial year. The
proposal is in line with Suominen’s dividend policy.
Suominen’s Board of Directors has set three medium-term financial targets for
the company, which will help measure the success of our strategy. We did not
achieve net sales growth in the 2016 financial period, and the return on
invested capital, 11.6%, fell slightly short of the target level (target: over
12%). Our gearing was close to the lower limit of our target range, at 39.6%
(target: 40–80%). Our determined work produced good results in many respects,
but our growth investment program and our focus to improve product development
and commercial know-how generated new net sales in a slower pace than we had
predicted. These efforts are essential for the acceleration of our growth and
for the improvement of our profitability.
The largest single project in our growth investment program is the
commissioning of the new production line focusing on higher value-added
products at the Bethune plant in the US. The production line equipment
installations were completed at the end of 2016, and deliveries to customers
are slated to begin in the first quarter of 2017. The production line is unique
in that it is tailored based on Suominen’s know-how and it focuses especially
on the manufacture of nonwovens for household and workplace wiping and for
flushable applications. Demand for these products is expected to grow at an
annual rate of 5–9%, depending on the geographical area.
Considering the orders received, net sales development in the first quarter of
2017 appears to be positive. We also estimate that Suominen’s net sales for the
full 2017 financial year will be better than in 2016. The comparable operating
profit is estimated to improve from year 2016, provided that the new production
line at the Bethune plant will be started up as planned.
We are now in the final leg of our three-year strategy period. I am satisfied
with the outcome of our work in many respects, despite not reaching our
targeted growth level. Thanks to our more than EUR 60 million investment
program, which is coming to a close, and our strengthened commercial
organization and boosted product development processes, we are in a better
position than before as we head into 2017 and our next strategy period.
We are currently fine-tuning Suominen’s strategic markers for the 2017–2021
period. The goal of our future strategy will also be to increase the share of
products with higher added value in our sales mix, which will lay the
groundwork for improving both our net sales and profitability. The new
technological opportunities offered by the production line investment in
Bethune will play a key role in helping us achieve that goal. The successful
execution of our strategy will bring Suominen’s net sales level above EUR 600
million in 2021. Moreover, we estimate that our operating profit will increase
to a clearly higher level compared to the current performance and we are
targeting an operating profit margin that exceeds 10%. We will communicate more
about our plans for the 2017–2021 period in connection with the first quarterly
report of 2017, which will be published on 26 April, and in greater detail on
Suominen’s Capital Markets Day on 10 May 2017.
NET SALES
October-December 2016
In the fourth quarter, Suominen’s net sales decreased by 3.7% from the
comparison period to EUR 100.4 (104.2) million. Tightened competition decreased
the demand and had an impact on pricing in selected product groups. Net sales
were affected by both lower sales prices and volumes compared to last year,
approximately in equal proportions. The revenue recognition of a larger than
usual number of customer deliveries was postponed into 2017. The strengthening
of the USD compared to EUR, Suominen’s reporting currency, increased the net
sales by EUR 0.9 million in the fourth quarter.
Suominen has two business areas, Convenience and Care. Net sales of Convenience
business area were EUR 92.5 (96.4) million and net sales of Care business area
EUR 7.8 (7.8) million in the fourth quarter. Convenience business area supplies
nonwovens as roll goods for household, personal care, workplace and baby care
wiping products. Care business area manufactures nonwovens for hygiene products
and medical applications.
Financial year 2016
In 2016, Suominen’s net sales fell by 6.1% from the comparison period to EUR
416.9 (444.0) million due to principally the same factors affecting net sales
in the fourth quarter. The strengthening of the USD compared to EUR, Suominen’s
reporting currency, increased the net sales of 2016 by approximately EUR 0.7
million.
Net sales of Convenience business area were EUR 385.5 (411.5) million and net
sales of Care business area EUR 31.3 (32.4) million. The main application areas
for nonwoven materials supplied by Suominen were baby wipes (accounting for 38%
of the sales), personal care wipes (25%), household wipes (18%), wipes for
workplace use (10%), and hygiene and medical products (8%). The share of baby
wipes in the product portfolio declined by two percentage points from 2015 and
the share of personal care wipes grew by three percentage points. The
development was in line with Suominen’s strategy, which aims at increasing the
share of products with higher added value in the portfolio. All wiping products
belong to the Convenience business area and all medical and hygiene products
belong to the Care business area.
OPERATING PROFIT AND RESULT
October-December 2016
Operating profit declined by 16.9% to EUR 3.5 (4.3) million due to lowered
sales volumes and pricing pressure created by tightened competition. Moreover,
the efforts made to improve R&D resources, to build the new production line at
the Bethune plant, and to renew the ICT systems increased Suominen’s costs and
therefore decreased the operating profit. The strengthening of the US dollar
compared to euro, Suominen’s reporting currency, increased the operating profit
by 1.6%. There were no items affecting comparability in the fourth quarters of
2016 and 2015.
Profit before income taxes in the fourth quarter was EUR 2.4 (2.9) million and
profit for the period EUR 1.6 (1.9) million.
Financial year 2016
Comparable operating profit decreased by 18.0% and amounted to EUR 25.6 million
(31.2). Operating profit was EUR 25.6 million (31.8). The decline in the
operating profit was due to lowered sales volumes and pricing pressure created
by tightened competition. Moreover, the efforts made to improve R&D resources,
to build the new production line at the Bethune plant, and to renew the ICT
systems increased Suominen’s costs and therefore decreased the operating profit
by approximately EUR 3 million. Items affecting comparability in 2015, EUR +0.5
million, consisted of reversal of previously made impairment losses of the
re-opened production line in Nakkila plant in Finland.
In 2016, profit before income taxes was EUR 22.4 (26.5) million, and profit for
the period was EUR 15.2 (17.0) million.
FINANCING
The Group’s net interest-bearing liabilities at the end of the review period,
31 December 2016, amounted to EUR 56.6 million (32.5). Gearing ratio was 39.6%
(25.9%) and equity ratio 45.3% (43.2%).
In 2016, net financial expenses were EUR -3.2 million (-5.3), or 0.8% (1.2%) of
net sales. In 2016, net financial expenses were improved by lower foreign
exchange losses than in 2015 (EUR -0.2 million) as well as capitalization of
borrowing costs in fixed assets as required by IAS 23 standard, which decreased
interest expenses by EUR 1.3 million. In 2015, financial expenses increased by
EUR -1.2 million due to fluctuations in exchange rates. In addition, in 2015
financial expenses increased also by EUR -0.4 million as an impairment loss of
shares in a real estate company, classified as available-for-sale, was
recognized. The shares of the real estate company were divested in July 2015.
Cash flow from operations in the fourth quarter was EUR 3.5 million (11.0) and
in 2016 EUR 28.5 million (27.3). Cash flow from operations per share in 2016
was EUR 0.56 (0.54). The financial items in the cash flow from operations, in
total EUR -3.9 million (-6.4), were principally impacted by the interests paid
during the reporting period. In total EUR 6.3 million was tied up in working
capital (2015: tied up 7.9). Cash flow from financing improved due to
repayments of loan receivables (EUR 1.0 million) granted in connection with the
divestment of the Flexibles business area in July 2014. Cash flow from
financing was decreased by repayment of loan in September, EUR 3.3 million.
CAPITAL EXPENDITURE
In 2016, the gross capital expenditure totaled EUR 53.3 million (23.7). Gross
capital investments increased mainly due to the progress of the investment in a
new wetlaid production line at the Bethune plant in SC, USA. In addition,
Suominen runs currently a Group-wide renewal of ICT systems. The other
investments were mainly for maintenance.
Suominen completed the machinery installations of the new production line at
the Bethune plant in the financial year 2016. The total value of the growth
investment of the Bethune plant was originally estimated to be roughly EUR 50
million. This original estimate will be exceeded, as Suominen announced on 9
August 2016.
Depreciation, amortization and impairment losses for the review period amounted
to EUR -18.5 million
(-18.2). The figure for 2015 does not include the reversal of an impairment
loss made at Nakkila plant due to the re-opening of a production line. The
reversal amounted to EUR +0.5 million.
PERSONNEL
Suominen employed during 2016 in average 646 persons (614), and 650 (636)
persons at the end of 2016. The new employees were hired primarily for the
Bethune plant in USA as its manufacturing capacity is expanding as well as to
other positions having strategic importance, such as R&D and product
management.
SHARE INFORMATION
Share capital
The number of Suominen’s registered shares was 51,665,642 on 31 December 2016,
equaling to a share capital of EUR 11,860,056.00. Suominen has one series of
shares. Each share carries one vote in the Shareholders’ Meeting and right to
an equally-sized dividend. Suominen’s shares are affiliated in a book-entry
system.
The number of shares increased in 2016 in total by 449,410 shares due to the
share conversions of the hybrid bond notes and accrued interests. The
conversion of the hybrid bond to equity has been recorded into the reserve for
invested unrestricted equity.
Reverse share split
The Annual General Meeting of Suominen Corporation held on 16 March 2016
decided to reduce the number of shares in the company without reducing share
capital in a reverse share split procedure pursuant to the Chapter 15, Section
9 of the Limited Liability Companies Act (624/2005) so that each five (5)
shares shall be merged as one (1) share.
Before the reverse share split, Suominen Corporation had in total 252,425,616
shares. After the reverse share split, the total number of shares in Suominen
Corporation is 51,216,232. The new number of shares was registered with the
Trade Register on 22 March 2016 and trading with the merged shares commenced on
the same day. The reverse split did not have an impact on the treasury shares
held by Suominen (913,886 shares at the date of the reverse split). In
accordance with the Limited Liability Companies Act, treasury shares do not
entitle to shareholder rights, such as right to receive dividend or other
distribution of funds, or right to attend General Meeting.
The purpose of merging the shares is to increase the interest for the company’s
shares, facilitate the trade in the shares and to increase flexibility in
defining the amount of dividend.
Share trading and price
The number of Suominen Corporation shares (SUY1V) traded on NASDAQ Helsinki
from 1 January to 31 December 2016 was 13,611,634 shares, accounting for 27.0%
of the average number of shares (excluding treasury shares). The highest price
was EUR 6.20, the lowest EUR 3.49 and the volume-weighted average price EUR
4.24. The closing price at the beginning of the review period, on 4 January
2016, was EUR 6.05 and the closing price at the end of review period, on 30
December 2016, was EUR 4.14.
The market capitalization (excluding treasury shares) was EUR 210.2 million on
31 December 2016.
Authorizations of the Board of Directors
The Annual General Meeting (AGM) held on 16 March 2016 authorized the Board of
Directors to repurchase a maximum of 400,000 of the company’s own shares. The
shares shall be repurchased to be used in company’s share-based incentive
programs, in order to disburse the remuneration of the members of the Board of
Directors, for use as consideration in acquisitions related to the company’s
business, or to be held by the company, to be conveyed by other means or to be
cancelled. The company’s own shares shall be repurchased otherwise than in
proportion to the holdings of the shareholders by using the non-restricted
equity through trading on regulated market organized by Nasdaq Helsinki Ltd at
the market price prevailing at the time of acquisition. The repurchase
authorization is valid until 30 June 2017.
The AGM held on 16 March 2016 authorized the Board of Directors 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 Limited Liability 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 5,000,000 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 5,000,000 shares in total which
number is included in the maximum number stated earlier. The authorization is
valid until 30 June 2019.
Remuneration of the Board payable in shares
Suominen’s Annual General Meeting held on 16 March 2016 resolved to keep the
remuneration of the members of the Board of Directors unchanged. The annual
remuneration of the Chair of the Board of Directors is EUR 50,000, of the
Deputy Chair EUR 37,500 and of the members, EUR 28,000. Further, the members of
the Board of Directors are paid a fee for attending meetings, such that each
member of the Board will receive EUR 500 for each meeting attended in the home
country of the respective member and EUR 1,000 for each meeting attended
elsewhere than in the home country of the respective member. 60% of the annual
remuneration is paid in cash and 40% in Suominen Corporation shares.
Of the remuneration payable in shares as described above, the number of shares
transferred was determined based on the share value in the stock exchange
trading maintained by Nasdaq 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 2016 of the
company was published. Shares (in total 20,799 shares) were given out of the
treasury shares held by the company by the decision of the Board of Directors
on 2 June 2016. 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. The transferred shares are of the same class as the company’s other
shares.
Share-based incentive plans for the management and key employees
Suominen Corporation has a share-based incentive plan for the Group management
and Group key employees, which is divided into Performance Share Plan and
Matching Share Plan.
Performance Share Plan
The Performance Share Plan includes three vesting periods, calendar years
2015–2017, 2016–2018 and 2017–2019. The Board of Directors will decide
separately on new earnings periods. In addition, the Board of Directors will
decide on the Plan’s performance criteria and required performance levels for
each criterion at the beginning of a vesting period. The Performance Share Plan
is directed to approximately 15-20 people. The Board of Directors is entitled
to reduce the rewards agreed in the Performance Share Plan if the limits set by
the Board of Directors for the share price are reached.
The potential reward of the Plan from the period 2015-2017 will be based on the
Suominen Group’s net sales growth, earnings before interest and taxes (EBIT%)
and return on invested capital (ROI%). The rewards to be paid on the basis of
the performance period 2015-2017 correspond to the value of an approximate
maximum total of 460,000 Suominen Corporation shares (including also the
proportion to be paid in cash).
The potential reward of the Plan from the period 2016-2018 will be based on the
Suominen Group´s net sales growth, earnings before interest and taxes (EBIT%)
and return on invested capital (ROI %). The rewards to be paid on the basis of
the performance period 2016-2018 correspond to the value of an approximate
maximum total of 245,000 Suominen Corporation shares (including also the
proportion to be paid in cash).
Suominen’s Board of Directors decided on 9 December 2016 on a new vesting
period of 2017–2019. The potential reward of the Plan from the period 2017–2019
will be based on the Suominen Group´s net sales growth, earnings before
interest and taxes (EBIT%) and return on invested capital (ROI %). The rewards
to be paid on the basis of the performance period 2017–2019 correspond to the
value of an approximate maximum total of 480,000 Suominen Corporation shares
(including also the proportion to be paid in cash).
The potential rewards from the earnings periods 2015–2017, 2016–2018 and
2017–2019 will be paid partly in the company’s shares and partly in cash in
2018, 2019 and 2020, respectively. The cash proportion is intended to cover
taxes and tax-related costs arising from the reward to the participant. As a
rule, no reward will be paid if a participant´s employment or service ends
before the reward payment.
The President & CEO of the company must hold 50% of the net number of shares
given on the basis of the Plan, as long as his or her shareholding in total
corresponds to the value of his or her annual gross salary. A member of the
Corporate Executive Team must hold 50% of the net number of shares given on the
basis of the Plan, as long as his or her shareholding in total corresponds to
the value of half of his or her annual gross salary. Such number of shares must
be held as long as the participant’s employment or service in a group company
continues.
Matching Share Plan 2015
The Matching Share Plan includes one three-year vesting period, calendar years
2015–2017. The prerequisite for receiving reward on the basis of this plan is
that a person participating in the plan owns or acquires the company’s shares
up to the number determined by the Board of Directors. Furthermore, receiving
of reward is tied to the continuance of participant´s employment or service
upon reward payment.
The members of the Corporate Executive Team and the Corporate Leadership Team
belong to the target group of the Matching Share Plan. The rewards to be paid
on the basis of the Matching Share Plan correspond to the value of an
approximate maximum total of 110,000 Suominen Corporation shares (including
also the proportion to be paid in cash).
The terms and conditions of the share-based incentive plans were technically
revised due to the reverse share split implemented on 21 March 2016.
Hybrid bond and conversion of the bond notes into Suominen shares in 2015
In February 2014, Suominen Corporation issued a EUR 17.5 million convertible
hybrid bond. In accordance with the terms and conditions of the bond, the
bondholders have a right to convert the bond notes and the accrued capitalized
interest related to the notes into Suominen shares. The conversion period
started on 11 February 2014 and will end on 10 February 2018. Conversion Rate
pursuant to the original terms of the bond is EUR 0.50 per share and is
determined market-based. The average volume weighted share price of the
company’s share during the last three (3) months before the issue of the bond
was EUR 0.48. After the reverse share split, conducted on 21 March 2016, the
Conversion Rates is EUR 2.50, in accordance with the Reverse Split Ratio.
In 2016, bond notes and the accrued capitalized interest related to the notes
were converted to total of 449,410 new shares in Suominen Corporation. The
conversion rate shall be recorded under the invested non-restricted equity fund
of Suominen.
The number of shares in Suominen may increase by maximum of 7,020,320 shares on
the basis of the conversion of the bond notes and the potential capitalized
interest, if the conversion is carried out by issuing new shares in Suominen.
SHAREHOLDERS
At the end of the review period, on 31 December 2016, Suominen Corporation had
in total 4,862 shareholders. Suominen is not aware of any shareholder
agreements related with the shareholding or use of voting rights. Detailed
information on the management shareholding and a table presenting the largest
shareholders is available in the notes of this Financial Statement Release.
Treasury shares
At the end of review period, on 31 December 2016, Suominen Corporation held
893,087 treasury shares. In accordance with the resolution by the Annual
General Meeting; in total 20,799 shares were transferred on 2 June 2016 to the
members of the Board of Directors as their remuneration payable in shares.
Notifications under Chapter 9, Section 5 of the Securities Market Act
On 10 June 2016, Suominen Corporation received a notification in accordance
with Chapter 9, Section 5 of the Securities Market Act. According to the
notification, the total shareholding of Mr. Erkki Etola and companies under his
controlling power in Suominen Corporation has exceeded the 10% flagging
threshold. According to the notification, Mr. Erkki Etola and companies under
his controlling power (Oy Etra Invest Ab and Tiiviste-Group Oy) hold 4,139,164
shares and votes directly (8.08% of all shares and votes) and 1,477,080 shares
and votes through financial instruments (2.88% of all shares and votes).
COMPOSITION OF THE 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 have been elected to Suominen Corporation’s permanent Nomination
Board. The shareholders entitled to appoint members to the Nomination Committee
were determined on the basis of the registered holdings in the company’s
shareholders' register on 2 September 2016.
The representatives appointed to the Nomination Board were Thomas Ahlström,
member of the Board of Directors of Ahlström Capital and Managing Director of
Antti Ahlström Perilliset Oy; Erkki Etola, CEO of Oy Etra Invest Ab; and Reima
Rytsölä, Executive Vice-President, Investments, of Varma Mutual Pension
Insurance Company. Jorma Eloranta, Chair of Suominen’s Board of Directors,
serves as the fourth member of the Nomination Board.
The Nomination Board shall submit its proposals to the Board of Directors no
later than 1 February prior to the Annual General Meeting.
ANNUAL GENERAL MEETING
The Annual General Meeting (AGM) of Suominen Corporation was held on 16 March
2016. The AGM decided that a dividend or EUR 0.02 per share will be paid for
the financial year 2015.
The AGM adopted the financial statements and the consolidated financial
statements for the financial year 2015 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 six
(6). The AGM re-elected Mr. Andreas Ahlström, Mr. Risto Anttonen, Mr. Jorma
Eloranta, Mr. Hannu Kasurinen, Ms. Laura Raitio and Ms. Jaana Tuominen as
members 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 remain
unchanged. The resolutions were in accordance with the proposals submitted by
the Nomination Board of shareholders of Suominen.
Ernst & Young Oy, accountant firm, was elected as auditor of Suominen
Corporation, with Ms. Kristina Sandin, Authorized Public Accountant, as the
principal auditor. The AGM decided that the auditor's fee would be paid
according to the invoice accepted by the company. The decisions were in
accordance with the proposal of the Board of Directors and the recommendation
by the Audit Committee.
The AGM resolved to amend the company’s Articles of Association so that the
limitation regarding Board members age was be removed from article 4 of the
Articles of Association and that in the future the Chair of the Board of
Directors is elected by the General Meeting instead of the Board of Directors.
In addition a corresponding technical addition were made to the article 13 of
the Articles of Association. The decision to amend the Articles of Association
was in accordance with the proposal of the Board of Directors.
The AGM decided to amend the Section 1 of the resolution by the General Meeting
on 26 March 2013 regarding the establishment of the permanent Shareholders’
Nomination Board. The change was related to the earlier decision taken by the
AGM to amend the Articles of Association and was made in accordance with the
proposal by the Board of Directors.
The AGM decided that the number of all shares in the company shall be reduced
without reducing share capital in a reverse share split procedure pursuant to
the Chapter 15, Section 9 of the Limited Liability Companies Act (624/2005)
(“Companies Act”) so that each five (5) shares shall be merged as one (1)
share. The decision was in accordance with the proposal by the Board of
Directors.
The AGM decided to authorize the Board of Directors to decide on the repurchase
of the company's own shares, on the share issue and granting of options and
other special rights entitling to shares referred to in Chapter 10, Section 1
of the Companies Act. The valid authorizations of the Board of Directors are
explained above.
Constitutive meeting and permanent committees of the Board of Directors
In its constitutive meeting held after the Annual General Meeting on 16 March
2016, the Board of Directors elected from among its members a Chair and Deputy
Chair as well as members for the Audit Committee and Personnel and Remuneration
Committee.
The Board of Directors re-elected Jorma Eloranta as Chair and Risto Anttonen as
Deputy Chair of the Board of Directors, in accordance with the recommendation
by the Nomination Board of Suominen’s shareholders.
Hannu Kasurinen was re-elected as Chair of the Audit Committee. Andreas
Ahlström was re-elected and Jaana Tuominen elected as members of the Audit
Committee. Jorma Eloranta was re-elected as Chair of the Personnel and
Remuneration Committee and Risto Anttonen was re-elected as a member. Laura
Raitio was elected as a new member to the Personnel and Remuneration Committee.
BUSINESS RISKS AND UNCERTAINTIES
The estimate on the development of Suominen’s net sales is partially based on
forecasts and delivery plans received from the company’s 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. This may affect Suominen’s financial result if
customers’ purchasing habits become more cautious as a result of a changes in
consumption, or as a result of sales losses. The Group’s ten largest customers
currently account for 63% (65%) of the Group net sales. Long-term contracts are
preferred with the largest customers. In practice the customer relationships
are long-term and last for several years. 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 and insures
against customer risks to a limited extent.
The relevance of the United States in Suominen’s business operations increases
the significance 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.
The risks that are characteristic to South American region, including
significant changes in business environment or exchange rates, could have an
impact on Suominen’s operations in Brazil.
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 have an impact on the company’s
profitability. Suominen’s stocks equal to two to four weeks’ consumption and
passing on the price changes of these raw materials to the prices Suominen
charges its contract customers takes two to five months.
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 some product groups
in Suominen’s both principal market regions. Products based on new technologies
and imports from countries of lower production costs may reduce Suominen’s
competitive edge. If Suominen is not able to compete with an attractive product
offering, it may lose some of its market share. Competition may lead to
increased pricing pressure on the company’s products.
Suominen continuously invests in its manufacturing facilities. The deployment
of the investments may delay from what was planned, the costs of the
investments may increase from what has been expected or the investments may
create less business benefits than anticipated. The deployment phase of
investments may cause temporary interruptions in operations.
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 may not be able to control these events through predictive
actions, which could lead to interruptions in business. Risks of this type are
insured in order to guarantee the continuity of operations. As Suominen has
valid damage and business interruption insurance, it is expected that the
damage would be compensated and the financial losses caused by the interruption
of business would be covered.
Suominen uses certain technologies in its production. In the 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.
Suominen aims to protect its business against product liability risks through
the use of systematic quality assurance processes and products liability
insurance. R&D function of the company is responsible for ensuring the
underlying safety of the group´s products during their development. Continuous
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.
Suominen is subject to corporate income taxes in numerous jurisdictions.
Significant judgment is required to determine the total amount of corporate
income tax at Group level. There are many transactions and calculations that
leave room for uncertainty as to the final amount of the income tax. Tax risks
relate also to changes in tax rates or tax legislation or misinterpretations,
and materialization of the risks 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 statement of financial position require
that the deferred tax assets can be recovered against the future taxable
income.
The Group is exposed to several financial risks, such as foreign exchange,
interest rate, counterparty, liquidity and credit risks. The Group’s financial
risks are managed in line with a policy confirmed by the Board of Directors.
The financial risks are described in the note 3 of the Financial Statements.
Suominen performs goodwill impairment testing annually. In impairment testing
the recoverable amounts are determined as the value in use, which comprises of
the discounted projected future cash flows. Actual cash flows can differ from
the discounted projected future cash flows. Uncertainties related to the
projected future cash flows include, among others, the long economic useful
life of the assets and changes in the forecast sales prices of Suominen’s
products, production costs as well as discount rates used in testing. Due to
the uncertainty inherent in the future, it is possible that Suominen’s
recoverable amounts will be insufficient to cover the carrying amounts of
assets, particularly goodwill. If this happens, it will be necessary to
recognize an impairment loss, which, when implemented, will weaken the result
and equity. Goodwill impairment testing has been described in the consolidated
financial statements.
BUSINESS ENVIRONMENT
Suominen’s nonwovens are, for the most part, used in daily consumer goods, such
as wet wipes as well as in hygiene and medical products. In these target
markets of Suominen, the general economic situation determines the development
of consumer demand, even though the demand for consumer goods is not very
cyclical in nature. North America and Europe are the largest market areas for
Suominen. At these market areas, the growth in the demand for nonwovens has
typically exceeded the growth of gross domestic product by a couple of
percentage points. Moreover, Suominen has operated in the growing South
American markets since 2014.
Consumers’ confidence in their personal financial situation improved in the
last quarter, both in Europe and especially in the US. The consumer confidence
indices closed at a higher level than both the end of 2015 and the third
quarter of 2016.
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. Due to the new manufacturing capacity
that has recently entered to the markets, primarily in nonwovens for baby wipes
and flushables, assessing the competitive situation during the review period
was more challenging than earlier.
At large, the growth in the demand in Suominen’s target markets is expected to
continue in 2017, on average, at the pace of 2016.
OUTLOOK FOR 2017
Suominen expects that for the full year 2017, its net sales will improve from
year 2016. Also the comparable operating profit is estimated to improve from
year 2016, provided that the new production line at the Bethune plant will be
started up as planned. In 2016, Suominen’s net sales amounted to EUR 416.9
million and comparable operating profit to EUR 25.6 million. The calculation of
comparable operating profit is explained in the disclosures of this release.
PROPOSAL ON DISTRIBUTION OF FUNDS
The profit of the financial year 2016 of Suominen Corporation, the parent
company of the Group, was EUR 7,722,811. The funds distributable as dividends,
including the profit for the period, of the parent company were EUR 12,640,843
and total distributable funds were EUR 83,496,233. There have been no
significant changes in the company’s financial position after the end of the
review period.
The Board of Directors proposes that a dividend of EUR 0.11 per share shall be
distributed for the financial year 2016 and that the rest of the profit shall
be transferred to retained earnings. The record date is 17 March 2017 and the
dividend will be paid on 24 March 2017.
DISCLOSURE OF THE FINANCIAL STATEMENTS AND THE REPORT BY THE BOARD OF DIRECTORS
Suominen Corporation will publish its financial statements, report by the Board
of Directors, Auditor’s report, Corporate Governance Statement and Remuneration
Statement concerning the financial year 2016 on 22 February 2017 at the latest.
The above documents will be published as a Stock Exchange Release and they will
be available also at www.suominen.fi > Investors > Corporate Governance.
ANNUAL GENERAL MEETING 2017
The Annual General Meeting of Suominen Corporation will be held on 15 March
2017 at the Finlandia Hall, Helsinki. The Board of Directors will convene the
Annual General Meeting by issuing a Notice to the Annual General Meeting as a
Stock Exchange Release.
THE NEXT FINANCIAL REPORT
Suominen Corporation will publish its Interim Report for January–March 2017 on
Wednesday, 26 April 2017 approximately at 1.00 pm EET.
ANALYST AND PRESS CONFERENCE
Nina Kopola, President & CEO, and Tapio Engström, CFO, will present Suominen’s
financial result for Q4 and full year 2016 in Finnish at an analyst and press
conference in Helsinki today on 31 January at 14:00 (EET). The conference will
take place at Suominen’s Helsinki office in Helsinki (Itämerentori 2). The
presentation material will be available after the analyst and press conference
at www.suominen.fi.
A teleconference and a webcast in on the 2016 financial result will be held
today on 31 January at 16:00 (EET). The conference can be attended by phone at
+44 20 3059 8125. Please use the password "Suominen". The conference can be
accessed also at www.suominen.fi/webcast. The teleconference will be held in
English. A replay of the conference can be accessed at www.suominen.fi/webcast
or by phone at +44 121 260 4861, using access code 5101387#.
SUOMINEN GROUP 1 JANUARY–31 DECEMBER 2016
The consolidated financial statements of Suominen have been audited. The
Auditor’s report has been signed on 31 January 2017. Quarterly information and
interim reports have not been audited.
As a result of rounding differences, the figures presented in the tables do not
necessarily add up to total.
ACCOUNTING PRINCIPLES
The consolidated financial statements of Suominen Group are prepared in
accordance with International Financial Reporting Standards (IFRS), including
International Accounting Standards (IAS) and Interpretations issued by the
International Financial Reporting Interpretations Committee (SIC and IFRIC).
International Financial Reporting Standards are standards and their
interpretations adopted in accordance with the procedure laid down in
regulation (EC) No 1606/2002 of the European Parliament and of the Council. The
Notes to the Financial Statements are also in accordance with the Finnish
Accounting Act and Ordinance and the Finnish Companies' Act.
This financial statements release has been prepared in accordance with the
principles defined in IAS 34 Interim Financial Reporting as approved by the
European Union. Financial statement release does not include all information
required for full financial statements.
The principles for preparing consolidated financial statements are the same as
those used for preparing the consolidated financial statements for 2015, except
that the following standards and interpretations have been applied from 1
January 2016:
Amendments to IAS 1 Presentation of Financial Statements clarify, among other
things, the materiality requirements of IAS 1. The amendments are effective for
the reporting periods beginning on 1 January 2016 or later, and they allow the
entity to decrease immaterial disclosure information in the consolidated
financial statements.
Annual Improvements 2012–2014, effective for reporting periods beginning on 1
January 2016 or later. The impacts of the standards vary but are not material
for Suominen's consolidated financial statements.
Below are disclosed separately those new standards, amendments and
interpretations which will have a material effect on Suominen. Other new or
amended standards or interpretations applicable from 1 January 2017 or later
are not material for Suominen Group.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 Revenue from Contracts with Customers is to be applied for the
reporting periods beginning on 1 January 2018 or later. The new standard
defines a five-step model to recognize revenue based on contracts with
customers and replaces the current standards IAS 18 and IAS 11 as well as their
interpretations. The timing of the revenue recognition can take place over time
or at a point of time, depending on the transfer of control. The new standard
will have no material effect on revenue recognition in Suominen, but it will
increase the disclosure information in the consolidated financial statements.
The goods Suominen sells are nonwoven rolls. The customer can benefit from each
nonwoven roll either on its own or together with other resources readily
available to the customer. The delivered goods have been identified in the
contracts Suominen has made with the customer (for example the quality and
measurements of the product have been defined). The contracts often define the
target for quantities to be delivered, but the customer is not committed to the
quantities. The supplied quantities are based on the customer’s purchase orders
and each supplied quantity is invoiced separately.
The performance obligation is satisfied when the goods have been delivered to
the customer, ie. the performance obligation is satisfied at a point of time.
In most cases the goods are handed over to the customer when the goods leave
the production plant. If, in accordance with the terms of delivery, the risks
and rewards of ownership of the goods as well as control over the goods are
transferred to the customer only when the goods have been delivered to the
customer, revenue is recognized only when the customer has received the goods.
This does not change the current revenue recognition principles of Suominen.
The payment terms and times differ depending on the customer. The applied
payment term and the length of the payment time are affected by, among other
things, the credit risk and prior payment behavior of the customer. In
addition, the geographical location of the invoicing production plant as well
of the customer have an effect on the payment terms. Suominen has preferred
payment terms defined in the credit policy, but for commercial reasons it is
possible to deviate from these payment terms. For the most part trade
receivables are due within 30–90 days from the invoicing date.
There are no significant financing components in the transaction prices and the
considerations are paid in cash. Some of the customer contracts include a
definition of a rebate, which is granted to the customer if the delivered
quantities exceed the predefined level, i.e. in these cases the transaction
price includes a variable consideration. The effect of the variable
consideration on the transaction price is taken into account in revenue
recognition by estimating the probability of the realization of the rebate for
each contract. The estimation is based on the most likely amount. When
estimating the probability, Suominen takes into account the historical
information of the customer (such as whether the deliveries in the past have
reached the level which entitles the customer to receive the rebate), the
current situation at the time of the delivery of the goods as well as forecasts
on future deliveries. The uncertainty inherent in estimating the variable
consideration is considered to be so immaterial that the variable consideration
has not been constrained. The estimated transaction price is reassessed latest
at the end of each reporting period. This does not change the current revenue
recognition principles of Suominen.
The receivable from the customer is recognized at the transaction price. This
means in practice that both the invoiced trade receivable from the customer and
recognized revenue are adjusted in accounting with an accrual based on the
estimated rebate amount. This will change the current practice in recognizing
amounts in the statement of financial position, as currently the rebate accrual
is recognized in accrued expenses.
In some of customer contracts the transaction price of the goods is tied to the
raw material costs of Suominen. The effect of the raw material prices on
transaction prices is, however, applied only to future transaction prices and
they do not affect the prices of already delivered goods. As the delivered
quantities are distinct performance obligations, raw material clauses are not
applied retrospectively.
Sales prices are defined in the customer contracts separately for each product.
The price for each customer is based on, among other things, quantities,
transaction currency and the geographical location of the customer. Variable
considerations (rebates) are allocated to the performance obligations which
included in the contract, unless otherwise agreed in the contract. In these
cases the variable considerations are allocated only to those performance
obligations they relate to.
Suominen has no material incremental costs of obtaining a contract which would
fulfill the capitalization criteria. Any incremental costs are recognized as
expense when incurred, as the amortization period of such capitalized
incremental costs would be one year or less. Suominen has no such costs to
fulfill a contract which would fulfill the capitalization criteria of IFRS
15.95-97.
IFRS 9 Financial Instruments
IFRS 9 Financial Instruments and its amendments are to be applied for the
reporting period beginning on 1 January 2018 or later. The new standard
replaces the current standard IAS 39 Financial Instruments: Recognition and
Measurement. IFRS 9 changes the classification and measurement of financial
assets and includes a new model for assessing the impairment of the financial
assets based on expected credit losses. The classification and measurement of
financial liabilities do not materially change from IAS 39. Hedge accounting
can be applied to a larger number of risk exposures than before and hedge
accounting principles have been harmonized with those used in risk management.
IFRS 9 will change the classification and measurement of some financial assets
of Suominen. Suominen has defined its business model for managing the financial
assets and based on the model as well as the characteristics of the financial
assets, determined the classification of the financial assets.
Certain loan receivables, which in accordance with IAS 39 have been classified
as loans and other receivables and measured at amortized cost, will be under
IFRS 9 financial assets at fair value through profit or loss, as they, among
other things, include terms which are not basic terms for loan receivables. For
these loan receivables the credit risk is taken into account when determining
the fair value of the receivables. Some of the loan receivables will continue
to be measured at amortized cost also under IFRS 9, as the their contractual
cash flows consist solely of payments of principal and interest, and Suominen’s
aim is to hold the receivables until maturity in order to collect the
contractual cash flows. For these loan receivables the credit risk and
impairment losses are estimated based on 12-month expected credit losses, or if
there has been an increase in the credit risk related to the receivable, based
on lifetime expected credit losses. Based on the situation at the end of the
reporting period, Suominen does not expect material negative fair value changes
or credit losses arise from the loan receivables.
For investments in equity instruments IFRS 9 enables the entity to make an
irrevocable election of classification and measurement by equity instrument.
Suominen classifies some of the investments in equity instruments at fair value
through profit or loss. With the classification both the fair value changes and
possible gains and losses on disposal are recognized in profit or loss. Some
equity instruments are classified at fair value through other comprehensive
income, and both fair value changes and possible gains and losses on disposal
are recognized in other comprehensive income without subsequent recycling to
profit or loss.
Cash and cash equivalents are measured under IFRS 9 at amortized cost. Under
IFRS 9 also cash and cash equivalents are subject to credit loss assessment,
and credit losses are recognized based on either 12-month expected credit
losses, or if there has been a significant increase in the credit risk related
to the receivable, based on lifetime expected credit losses. Based on the
situation at the end of the reporting period and taking into account the
counterparty credit risk related to deposits in banks, Suominen does not expect
to recognize material credit losses from cash and cash equivalents.
Derivative instruments for which hedge accounting is not applied, are
recognized also under IFRS 9 at fair value through profit or loss. At the end
of the reporting period Suominen has applied hedge accounting only to cash flow
hedges, and applying IFRS 9 will not change the recognition or measurement of
them.
Trade receivables are measured under IFRS 9 at amortized cost. Under IAS 39
they are classified as loans and other receivables and measured at amortized
cost. The value of trade receivables depends on the transaction price of sold
goods. Transaction price is measured in accordance with IFRS 15 Revenue from
Contracts with Customers -standard. In defining the transaction price, for
example the variable considerations included in the contracts, such as volume
rebates, are taken into account. This means that the transaction price can be
lower than the sales amount invoiced from the customer. Suominen recognizes
already currently in profit or loss the estimated customer rebates and other
potential variable consideration, so the effects of applying IFRS 15 on
transaction price are not estimated to be material. As the accruals for
variable considerations are presented in the statement of financial position as
accrued expenses before IFRS 9 is applied and under IFRS 9 as items decreasing
trade receivables, the carrying amount of trade receivables will change under
IFRS 9.
Suominen applies the practical expedient allowed by IFRS 9 for impairment
losses arising from trade receivables and uses a provision matrix in estimating
the impairment losses based on historical experience on realized credit losses.
In accordance with the provision matrix, the impairment losses of trade
receivables are based on lifetime expected credit losses. Trade receivables are
categorized based on risk characteristics of the customers taking into account
the customers’ capability to pay all contractual amounts as agreed in the
contracts. Risk characteristics include, among others, the geographical risk
related to the customer.
In accordance with IFRS 9, the expected credit losses on trade receivables are
a probability-weighted estimate of credit losses over the expected life. As
historically Suominen’s realized credit losses have mainly been immaterial and
as approximately half of the trade receivables were at the end of the reporting
period from international customers with high credit rating, Suominen estimates
that recognizing credit losses from trade receivables in accordance with IFRS 9
will not have any material effect on profit or loss. The main change would be
that credit losses will be recognized earlier than before.
Compared with IAS 39, IFRS 9 will not change the measurement or classification
of financial liabilities.
IFRS 16 Leases
IFRS 16 Leases will be effective for the reporting periods beginning on 1
January 2019 or later, if approved by European Union. The new standard will
replace the current standard IAS 16 Leases. In accordance with the new
standard, the lessee will recognize assets and liabilities for the rights and
obligations created by leases. The new standard will increase interest-bearing
liabilities and property, plant and equipment as well as intangible assets in
the consolidated financial statements of Suominen. In addition, the rental
expenses recognized in profit or loss will decrease and depreciation and
amortization as well as interest expenses will increase. This will affect
operating profit.
Suominen owns the majority of its production facilities (ie. buildings and
land) as well as all of its production lines. The most significant leasing
agreements Suominen has consist of the leased production facilities in Italy
and Windsor Locks, USA. Other leasing agreements are mainly leasing agreements
on offices and smaller machinery and equipment.
The carrying amounts of the lease liabilities and right-of-use assets depend
on, among other things, the length of the leasing contracts as well as the
potential options and possibilities to lengthen or shorten the lease term. The
carrying amounts are especially affected with the estimates made of the lease
terms and possible renewals of the lease agreements of the production
facilities. At the end of the reporting period Suominen estimates that the
carrying amounts of lease liabilities and right-of-use assets arising from
application of IFRS 16 will be approximately EUR 25–30 million.
Amendments to IFRS 2 Classification and Measurement of Share-base Payment
Transactions
The amendments to IFRS 2, effective for annual periods beginning on or after 1
January 2018, will change the recognition and measurement of share-based
payment transactions which have net settlement features for withholding tax
obligations. Under such transactions the entity withholds a number of shares
that are equal to the monetary value of the employee’s tax obligation from the
total number of shares that would have otherwise been issued to the employee
upon exercise or vesting, and transfers the amount in cash to tax authorities
on behalf of the employee.
Currently the cash-settled share-based payment transactions are measured at
fair value at the reporting date and recognized as a liability in the statement
of financial position. After the application of the amendments of IFRS 2, the
currently cash-settled portion of share-based payment transactions which have
net settlement features for withholding tax obligations will be recognized and
measured as equity-settled. At transition date, the cash-settled portion of any
unvested share-based payment arrangement which has net settlement features will
be remeasured and recognized as equity-settled at fair value and recognized in
equity. The liability for the cash settled transaction will be derecognized
from the statement of financial position, and any effect of the remeasurement
will be recognized in equity.
As Suominen’s share-based payment programs have net settlement features, the
amendment will change Suominen’s accounting and measurement for cash settled
share-based payments.
STATEMENT OF FINANCIAL POSITION
EUR thousands 31.12.2016 31.12.2015
-------------------------------------------------------------------------
Assets
Non-current assets
Goodwill 15,496 15,496
Intangible assets 14,133 13,275
Property, plant and equipment 135,510 97,931
Loan receivables 6,836 7,793
Available-for-sale assets 777 777
Other non-current receivables 2,524 2,402
Deferred tax assets 3,424 4,491
-------------------------------------------------------------------------
Total non-current assets 178,698 142,165
-------------------------------------------------------------------------
Current assets
Inventories 42,631 32,557
Trade receivables 53,946 51,547
Loan receivables 1,550 1,000
Other current receivables 7,274 7,038
Assets for current tax 2,008 1,874
Cash and cash equivalents 29,522 55,570
-------------------------------------------------------------------------
Total current assets 136,929 149,585
-------------------------------------------------------------------------
Total assets 315,628 291,750
-------------------------------------------------------------------------
Equity and liabilities
Share capital 11,860 11,860
Share premium account 24,681 24,681
Reserve for invested unrestricted equity 70,855 69,652
Treasury shares -44 -44
Fair value and other reserves 10 -118
Exchange differences 12,613 5,097
Other equity 6,324 -3,076
-------------------------------------------------------------------------
Total equity attributable to owners of the parent 126,300 108,052
Hybrid bond 16,525 17,664
-------------------------------------------------------------------------
Total equity 142,824 125,716
-------------------------------------------------------------------------
Liabilities
Non-current liabilities
Deferred tax liabilities 11,195 10,890
Liabilities from defined benefit plans 1,081 1,105
Other non-current liabilities 364 651
Debentures 75,000 75,000
Other non-current interest-bearing liabilities 11,574 18,498
-------------------------------------------------------------------------
Total non-current liabilities 99,214 106,144
Current liabilities
Current interest-bearing liabilities 7,923 3,363
Liabilities for current tax 280 47
Trade payables and other current liabilities 65,388 56,479
-------------------------------------------------------------------------
Total current liabilities 73,590 59,889
Total liabilities 172,804 166,034
-------------------------------------------------------------------------
Total equity and liabilities 315,628 291,750
-------------------------------------------------------------------------
STATEMENT OF PROFIT OR LOSS
EUR thousands 10-12/2016 10-12/2015 1-12/2016 1-12/2015
--------------------------------------------------------------------------
Net sales 100,365 104,244 416,862 444,042
Cost of goods sold -89,413 -92,972 -364,636 -386,042
--------------------------------------------------------------------------
Gross profit 10,952 11,272 52,226 58,000
Other operating income 324 3 1,909 2,637
Sales and marketing expenses -2,162 -2,410 -7,364 -7,760
Research and development -1,362 -925 -4,330 -3,527
Administration expenses -3,938 -3,963 -16,191 -16,709
Other operating expenses -275 284 -629 -862
--------------------------------------------------------------------------
Operating profit 3,540 4,262 25,622 31,778
Net financial expenses -1,149 -1,358 -3,190 -5,302
--------------------------------------------------------------------------
Profit before income taxes 2,391 2,903 22,432 26,476
Income taxes -759 -984 -7,199 -9,456
--------------------------------------------------------------------------
Profit for the period 1,632 1,919 15,233 17,020
--------------------------------------------------------------------------
Earnings per share, EUR
Basic 0.03 0.03 0.29 0.32
Diluted 0.03 0.03 0.26 0.29
--------------------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME
EUR thousands 10-12/ 10-12/ 1-12/2 1-12/2
2016 2015 016 015
--------------------------------------------------------------------------------
Profit for the period 1,632 1,919 15,233 17,020
Other comprehensive income:
Other comprehensive income that will be
subsequently reclassified to profit or loss
Exchange differences 6,941 4,386 7,881 2,356
Fair value changes of cash flow hedges and -268 -286 245 -970
available-for-sale assets
Reclassified to profit or loss 5 51 116 669
Reclassified to property, plant and equipment -11 91 -188 91
Income taxes related to other comprehensive -100 -952 -410 -632
income
--------------------------------------------------------------------------------
Total 6,567 3,291 7,644 1,514
Other comprehensive income that will not be
subsequently reclassified to profit or loss
Remeasurements of defined benefit plans -110 -26 -110 -26
Income taxes related to other comprehensive 16 8 16 8
income
--------------------------------------------------------------------------------
Total -93 -18 -93 -18
Total comprehensive income for the period 8,106 5,192 22,784 18,516
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN EQUITY
EUR thousands Share Share Reserve for invested Treasury Exchange
capital premium unrestricted equity shares difference
account s
--------------------------------------------------------------------------------
Equity 1 11,860 24,681 69,652 -44 5,097
January 2016
--------------------------------------------------------------------------------
Profit / loss − − − − −
for the
period
Other − − − − 7,516
comprehensive
income
--------------------------------------------------------------------------------
Total − − − − 7,516
comprehensive
income
Share-based − − − − −
payments
Dividend − − − − −
distribution
Conveyance of − − 80 − −
treasury
shares
Conversion of − − 1,124 − −
hybrid bond
Hybrid bond − − − − −
Equity 31 11,860 24,681 70,855 -44 12,613
December 2016
--------------------------------------------------------------------------------
EUR thousands Fair value and Other Total Hybrid Total
other reserves equity bond equity
--------------------------------------------------------------------------------
Equity 1 January -118 -3,076 108,052 17,664 125,716
2016
--------------------------------------------------------------------------------
Profit / loss for − 15,233 15,233 − 15,233
the period
Other comprehensive 128 -93 7,551 − 7,551
income
--------------------------------------------------------------------------------
Total comprehensive 128 15,140 22,784 − 22,784
income
Share-based − 190 190 − 190
payments
Dividend − -5,030 -5,030 − -5,030
distribution
Conveyance of − − 80 − 80
treasury shares
Conversion of − − 1,124 -1,124 −
hybrid bond
Hybrid bond − -899 -899 -16 -915
Equity 31 December 10 6,324 126,300 16,525 142,824
2016
--------------------------------------------------------------------------------
EUR thousands Share Share Reserve for Treasury Exchange
capital premium invested shares difference
account unrestricted s
equity
--------------------------------------------------------------------------------
Equity 1 January 11,860 24,681 97,192 -44 3,419
2015
--------------------------------------------------------------------------------
Profit / loss for − − − − −
the period
Other − − − − 1,730
comprehensive
income
--------------------------------------------------------------------------------
Total − − − − 1,730
comprehensive
income
Share-based − − − − −
payments
Share issue − − 340 − −
Distribution of − − -2,504 − −
funds
Reversal of − − − − −
undistributed
dividends
Conveyance of − − 80 − −
treasury shares
Reclassifications − − -27,448 − -51
Conversion of − − 1,992 − −
hybrid bond
Hybrid bond − − − − −
Equity 31 11,860 24,681 69,652 -44 5,097
December 2015
--------------------------------------------------------------------------------
EUR thousands Fair value and Other Total Hybrid Total
other reserves equity bond equity
--------------------------------------------------------------------------------
Equity 1 January 2015 96 -46,890 90,313 18,424 108,737
--------------------------------------------------------------------------------
Profit / loss for the − 17,020 17,020 − 17,020
period
Other comprehensive -216 -18 1,496 − 1,496
income
--------------------------------------------------------------------------------
Total comprehensive -216 17,002 18,516 − 18,516
income
Share-based payments − 316 316 − 316
Share issue − − 340 − 340
Distribution of funds − − -2,504 − -2,504
Reversal of − 2 2 − 2
undistributed
dividends
Conveyance of treasury − − 80 − 80
shares
Reclassifications − 27,499 − − −
Conversion of hybrid − − 1,992 -1,992 −
bond
Hybrid bond − -1,004 -1,004 1,232 228
Equity 31 December -118 -3,076 108,052 17,664 125,716
2015
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
EUR thousands 1-12/201 1-12/201
6 5
--------------------------------------------------------------------------------
Cash flow from operations
Profit / loss for the period 15,233 17,020
Total adjustments to profit / loss for the period 29,783 32,870
--------------------------------------------------------------------------------
Cash flow before changes in net working capital 45,016 49,890
Change in net working capital -6,277 -7,921
Financial items -3,895 -6,425
Income taxes -6,348 -8,269
--------------------------------------------------------------------------------
Cash flow from operations 28,496 27,274
Cash flow from investments
Investments in property, plant and equipment and intangible -49,553 -22,369
assets
Cash flow from disposed businesses 313 167
Adjustments of purchase consideration 161 −
Sales proceeds from property, plant and equipment and 8 10
intangible assets
--------------------------------------------------------------------------------
Cash flow from investments -49,072 -22,192
Cash flow from financing
Drawdown of other non-current interest-bearing liabilities − 15,000
Repayment of other non-current interest-bearing liabilities − -3,333
Changes in current interest-bearing liabilities -3,359 -14
Changes in loan receivables 1,000 600
Share issue − 340
Paid interest on hybrid bond -624 −
Dividend distribution / distribution of funds -5,030 -2,504
--------------------------------------------------------------------------------
Cash flow from financing -8,013 10,089
Change in cash and cash equivalents -28,588 15,171
Cash and cash equivalents at the beginning of the period 55,570 38,430
Effect of changes in exchange rates 2,540 1,968
Change in cash and cash equivalents -28,588 15,171
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 29,522 55,570
--------------------------------------------------------------------------------
KEY RATIOS
10-12/ 10-12/ 1-12/ 1-12/
2016 2015 2016 2015
--------------------------------------------------------------------------------
Change in net sales, % * -3.7 -0.5 -6.1 10.5
Gross profit, as percentage of net 10.9 10.8 12.5 13.1
sales, %
Comparable gross profit, as percentage 10.9 10.8 12.5 12.9
of net sales, %
Operating profit, as percentage of net 3.5 4.1 6.1 7.2
sales, %
Comparable operating profit, as 3.5 4.1 6.1 7.0
percentage of net sales, %
Net financial items, as percentage of -1.1 -1.3 -0.8 -1.2
net sales, %
Profit before income taxes, as 2.4 2.8 5.4 6.0
percentage of net sales, %
Profit for the period, as percentage of 1.6 1.8 3.7 3.8
net sales, %
Gross capital expenditure, EUR thousands 26,826 9,815 53,320 23,660
Depreciation, amortization, impairment 4,693 4,641 18,520 17,684
losses and reversal of impairment
losses, EUR thousands
Return on equity, rolling 12 months, % − − 11.6 14.4
Return on invested capital, rolling 12 − − 11.6 15.9
months, %
Equity ratio, % − − 45.3 43.2
Gearing, % − − 39.6 25.9
Earnings per share, EUR, basic ** 0.03 0.03 0.29 0.32
Earnings per share, EUR, diluted ** 0.03 0.03 0.26 0.29
Cash flow from operations per share, EUR 0.07 0.22 0.56 0.54
**
Equity per share, EUR ** − − 2.81 2.50
Dividend per share, EUR *** − − 0.11 0.10
Price per earnings per share (P/E) ratio − − 14.1 19.4
Dividend payout ratio / payout ratio for − − 37.6 31.3
distribution of funds, %
Dividend yield, % − − 2.66 1.61
Number of shares, end of period, − − 50,772,555 50,302,346
excluding treasury shares **
Share price, end of period, EUR ** − − 4.14 6.20
Share price, period low, EUR ** − − 3.49 3.75
Share price, period high, EUR ** − − 6.20 6.65
Volume weighted average price during the − − 4.24 5.05
period, EUR **
Market capitalization, EUR million − − 210.2 311.9
Number of traded shares during the − − 13,611,634 19,502,550
period **
Number of traded shares during the − − 27.0 38.9
period, % of average number of shares
31.12.2016 31.12.2015
Interest-bearing net debt, EUR thousands
Non-current interest-bearing liabilities 86,574 93,498
Current interest-bearing liabilities 7,923 3,363
Interest-bearing receivables and cash -37,908 -64,363
and cash equivalents
--------------------------------------------------------------------------------
Interest-bearing net debt 56,589 32,499
--------------------------------------------------------------------------------
* Compared with the corresponding period in the previous year.
** Comparative information adjusted with the effects of the reverse share
split.
**** Dividend per share 2016 is the proposal by the Board of Directors to the
Annual General Meeting.
CALCULATION OF KEY RATIOS
Definition of the calculation of the key ratios is explained at Suominen’s
website www.suominen.fi > Investors > Financials > Calculation of key figures.
Earnings per share
Basic earnings per share (EPS) = Profit for the period adjusted with interest
on hybrid bond, net of tax / Share-issue adjusted average number of shares
excluding treasury shares
Diluted earnings per share (EPS) = Profit for the period / Share-issue adjusted
average number of shares excluding treasury shares
Operating profit
Operating profit (EBIT) = Profit after depreciation, amortization and impairment
Comparable operating profit (EBIT) = Profit after depreciation, amortization
and impairment adjusted with items affecting comparability
In accordance with the recommendation by European Securities and Markets
Authority, Suominen no longer presents operating profit excluding non-recurring
items as an alternative performance measure. In order to improve the
comparability of result between reporting periods, Suominen presents comparable
operating profit as an alternative performance measure. Operating profit is
adjusted with material items that are considered to affect comparability
between reporting periods. These items include, among others, impairment losses
or reversals of impairment losses, gains or losses from the sales of property,
plant and equipment or intangible assets or other assets and restructuring
costs.
EUR thousand 2016 2015
---------------------------------------------
Operating profit 25,622 31,778
Reversal of impairment losses − -530
---------------------------------------------
Comparable operating profit 25,622 31,248
---------------------------------------------
Reversal of impairment loss, EUR +0.5 million, is the reversal of a previously
made impairment loss related to the re-opened production line in Nakkila plant
in Finland. The reversal of the impairment loss is recognized in costs of goods
sold.
Key ratios per share
Cash flow from operations per share = Cash flow from operations / Share-issue
adjusted number of shares excluding treasury shares, end of reporting period
2016 2015
--------------------------------------------------------------------------------
Cash flow from operations, EUR thousand 28,496 27,274
Share-issue adjusted number of shares excluding treasury 50,772,555 50,302,346
shares, end of reporting period
--------------------------------------------------------------------------------
Cash flow from operations per share, EUR 0.56 0.54
--------------------------------------------------------------------------------
Equity per share = Total equity / Share-issue adjusted number of shares
excluding treasury shares, end of reporting period
2016 2015
--------------------------------------------------------------------------------
Total equity, EUR thousand 142,824 125,716
Share-issue adjusted number of shares excluding treasury 50,772,555 50,302,346
shares, end of reporting period
--------------------------------------------------------------------------------
Equity per share, EUR 2.81 2.50
--------------------------------------------------------------------------------
Dividend per share = Dividend distributed for the reporting period / Number of
issued shares at end of the period excluding treasury shares
2016 2015
--------------------------------------------------------------------------------
Dividend distributed for the reporting period, EUR 5,585 5,030
thousand
Number of issued shares at end of the period excluding 50,772,555 50,302,346
treasury shares
--------------------------------------------------------------------------------
Dividend per share, EUR 0.11 0.10
--------------------------------------------------------------------------------
Dividend payout ratio, % = (Dividend per share x 100) / Basic earnings per share
2016 2015
-------------------------------------------
Dividend per share x 100 11.00 10.00
Basic earnings per share, EUR 0.29 0.32
-------------------------------------------
Dividend payout ratio, % 37.6 31.3
-------------------------------------------
Dividend yield, % = (Dividend per share x 100) / Share price at end of the
period
2016 2015
------------------------------------------------------------
Dividend/distribution of funds per share x 100 11.00 10.00
Share price at end of the period, EUR 4.14 6.20
------------------------------------------------------------
Dividend yield, % 2.66 1.61
------------------------------------------------------------
Price per earnings per share (P/E) = Share price at end of the period / Basic
earnings per share
2016 2015
---------------------------------------------------
Share price at end of the period, EUR 4.14 6.20
Basic earnings per share, EUR 0.29 0.32
---------------------------------------------------
Price per earnings per share (P/E) 14.13 19.41
---------------------------------------------------
Market capitalization = Number of shares at the end of reporting period
excluding treasury shares x share price at the end of period
2016 2015
--------------------------------------------------------------------------------
Number of shares at the end of reporting period 50,772,555 50,302,346
excluding treasury shares
Share price at end of the period, EUR 4.14 6.20
--------------------------------------------------------------------------------
Market capitalization, EUR miilion 210.2 311.9
--------------------------------------------------------------------------------
Share turnover = The proportion of number of shares traded during the period to
weighted average number of shares excluding treasury shares
2016 2015
--------------------------------------------------------------------------
Number of shares traded during the period 13,611,634 19 502 550
Average number of shares excluding treasury shares 50 343 806 50,119,433
--------------------------------------------------------------------------
Share turnover, % 27.0 38.9
--------------------------------------------------------------------------
Other key ratios
EBITDA = Profit before depreciation, amortization and impairment (EBIT +
depreciation, amortization and impairment losses)
EUR thousand 2016 2015
------------------------------------------------------------------
Operating profit 25,622 31,778
+ Depreciation, amortization and impairment losses 18,520 17,684
------------------------------------------------------------------
EBITDA 44,142 49,462
------------------------------------------------------------------
Cash and cash equivalents = Cash + other financial assets
Interest-bearing net debt = Interest-bearing liabilities - interest-bearing
receivables - cash and cash equivalents
EUR thousand 2016 2015
----------------------------------------------
Interest-bearing liabilities 94,497 96,862
Interest bearing receivables -8,386 -8,793
Cash and cash equivalents -29,522 -55,570
----------------------------------------------
Interest-bearing net debt 56,589 32,499
----------------------------------------------
Return on equity (ROE), % = (Profit for the reporting period (rolling 12
months) x 100) / Total equity (quarterly average)
EUR thousand 2016 2015
---------------------------------------------------------------------
Profit for the reporting period (rolling 12 months) 15,233 17,020
Total equity 31 December 2015 / 2014 125,716 108,737
Total equity 31 March 2016 / 2015 120,806 115,051
Total equity 30 June 2016 / 2015 130,712 119,328
Total equity 30 September 2016 / 2015 135,186 120,360
Total equity 31 December 2016 / 2015 142,824 125,716
---------------------------------------------------------------------
Average 131,049 117,838
Return on equity (ROE), % 11.,6 14.4
---------------------------------------------------------------------
Invested capital = Total equity + interest-bearing liabilities
EUR thousand 2016 2015
----------------------------------------------
Total equity 142,824 125,716
Interest-bearing liabilities 94,497 96,862
----------------------------------------------
Invested capital 237,321 222,578
----------------------------------------------
Return on invested capital (ROI), % = (Operating profit + financial income
(rolling 12 months) x 100) / Invested capital, quarterly average
EUR thousand 2016 2015
-----------------------------------------------------------
Operating profit (rolling 12 months) 25,622 31,778
Financial income (rolling 12 months) 727 734
-----------------------------------------------------------
Total 26,349 32,512
Invested capital 31 December 2015 / 2014 222,578 193,750
Invested capital 31 March 2016 / 2015 217,181 200,051
Invested capital 30 June 2016 / 2015 227,594 204,328
Invested capital 30 September 2016 / 2015 228,648 202,027
Invested capital 31 December 2016 / 2015 237,321 222,578
-----------------------------------------------------------
Average 226,664 204,547
Return on invested capital (ROI), % 11.6 15.9
-----------------------------------------------------------
Equity ratio, % = (Total equity x 100) / (Total assets - advances received)
EUR thousand 2016 2015
-----------------------------------
Total equity 142,824 125,716
Total assets 315,628 291,750
Advances received -3 -596
-----------------------------------
315,625 291,154
Total 45.3 43.2
-----------------------------------
Gearing, % = (Interest-bearing net debt x 100) / Total equity
EUR thousand 2016 2015
-------------------------------------------
Interest-bearing net debt 56,589 32,499
Total equity 142,824 125,716
-------------------------------------------
Gearing, % 39.6 25.9
-------------------------------------------
NET SALES BY GEOGRAPHICAL MARKET AREA
EUR thousands 1-12/2016 1-12/2015
---------------------------------------------
Finland 2,386 2,724
Rest of Europe 158,118 159,854
North and South America 246,287 271,634
Rest of the world 10,071 9,830
---------------------------------------------
Total 416,862 444,042
---------------------------------------------
QUARTERLY DEVELOPMENT
2016 2015
-----------------------------------------------------------------------
EUR 10-12 7-9 4-6 1-3 10-12 7-9 4-6 1-3
thousan
ds
--------------------------------------------------------------------------------
Net 100,365 103,796 108,832 103,869 104,244 114,919 112,944 111,934
sales
--------- --------- --------
Comparab 3,540 7,878 8,661 5,543 4,262 9,763 9,932 7,292
le
operati
ng
profit
--------- --------- --------
as % of 3.5 7.6 8.0 5.3 4.1 8.5 8.8 6.5
net
sales
--------- --------- --------
Items − − − − − − 530 −
affecti
ng
compara
bility
--------------------------------------------------------------------------------
Operatin 3,540 7,878 8,661 5,543 4,262 9,763 10,462 7,292
g profit
--------- --------- --------
as % of 3.5 7.6 8.0 5.3 4.1 8.5 9.3 6.5
net
sales
--------- --------- --------
Net -1,149 -830 -967 -244 -1,358 -1,247 -1,076 -1,621
financi
al items
--------------------------------------------------------------------------------
Profit 2,391 7,047 7,694 5,299 2,903 8,517 9,386 5,670
before
income
taxes
--------- --------- --------
as % of 2.4 6.8 7.1 5.1 2.8 7.4 8.3 5.1
net
sales
--------------------------------------------------------------------------------
INFORMATION ON RELATED PARTIES
Suominen Group's related parties include the parent of the Group (Suominen
Corporation) and subsidiaries. In addition, the related parties of Suominen
include the members of the Board of Directors, President & CEO and the members
of the Corporate Executive Team as well as their family members and their
controlled companies. In addition, shareholders who have a significant
influence in Suominen through share ownership are included in related parties.
Suominen has no associated companies.
In its transactions with related parties Suominen follows the same commercial
terms as in transactions with third parties.
The Annual General Meeting held on 16 March 2016 resolved that 40 percent of
the annual remuneration for the Board of Directors is paid in Suominen
Corporation’s shares. The number of shares transferred to the members of the
Board of Directors as their remuneration payable in shares for 2016 was 20,799
shares. The shares were transferred on 6 June 2016 and the value of the
transferred shares totaled EUR 79,793, or approximately EUR 3.83638 per share.
Management remuneration
The remuneration of Suominen Corporation’s Board of Directors totaled to EUR
227 thousand in 2016, of which EUR 80 thousand was remuneration in shares. The
remuneration of the President & CEO, including fringe benefits was EUR 426
thousand, statutory pension payments totaled EUR 31 thousand and voluntary
pension payments were EUR 46 thousand. The remuneration of other related
parties, including fringe benefits totaled EUR 1,423 thousand, statutory
pension payments were EUR 118 thousand and voluntary pension payments were EUR
73 thousand. The accrual based on the new share-based incentive plans for the
related parties was EUR 212 thousand at the end of the review period.
Management share ownership
shares
Board of Directors 31 Dec 2016
------------------------------------------------------------
Jorma Eloranta, Chair of the Board of Directors 40,030
Risto Anttonen, Deputy Chair of the Board 28,830
Hannu Kasurinen 19,210
Jaana Tuominen 9,306
Andreas Ahlström 5,360
Laura Raitio 5,360
------------------------------------------------------------
Total 108,096
------------------------------------------------------------
Total % of shares and votes 0.21 %
Corporate Executive Team
-------------------------------------
Nina Kopola, President & CEO 85,172
Tapio Engström 33,266
Larry L. Kinn 6,348
Lynda A. Kelly 10,000
Ernesto Levy 12,000
Mimoun Saïm 21,525
Hannu Sivula 29,345
Total 197,656
-------------------------------------
Total % of shares and votes 0.39 %
THE LARGEST SHAREHOLDERS ON 31 DECEMBER 2016
Shareholder Number of % of shares and
shares votes
--------------------------------------------------------------------------------
---------------------------------
AC Invest Two BV 13,953,357 27.01 %
Oy Etra Invest Ab 5,055,120 9.78 %
Varma Mutual Pension Insurance Company 4,500,000 8.71 %
Ilmarinen Mutual Pension Insurance Company 3,251,811 6.29 %
Pension Insurance Company Elo 3,024,651 5.85 %
Nordea Nordic Small Cap Fund 1,537,152 2.98 %
Nordea Bank Finland Plc 1,425,836 2.76 %
OP Delta Fund 1,210,283 2.34 %
Nissi Evald and Hilda 1,000,000 1.94 %
Heikki Bergholm 880,168 1.70 %
Nordea Life Assurance Finland Ltd 712,000 1.38 %
Juhani Maijala 657,346 1.27 %
Mikko Maijala 625,918 1.21 %
Skandinaviska Enskilda Banken, Helsinki Branch 590,985 1.14 %
Onvest Investment Ltd. 501,338 0.97 %
--------------------------------------------------------------------------------
15 largest total 38,925,965 75.34 %
Other shareholders 9,717,783 18.81 %
Nominee registered 2,124,758 4.11 %
Treasury shares 893,087 1.73 %
In joint account (not in the book-entry 4,049 0.01 %
securities system)
Total 51,665,642 100.00 %
--------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
31.12.2016 31.12.2015
---------------------------
EUR thousands Property, plant Intangibl Property, plant Intangibl
and equipment e assets and equipment e assets
--------------------------------------------------------------------------------
Carrying amount at the 97,931 13,275 88,721 12,510
beginning of the period
-----------------
Capital expenditure 50,020 3,300 20,733 2,927
-----------------
Disposals − -89 − -10
-----------------
Depreciation, -16,162 -2,358 -15,957 -2,257
amortization and
impairment losses
-----------------
Reversal of impairment − − 530 −
losses
-----------------
Exchange differences and 3,721 4 3,904 104
other changes
--------------------------------------------------------------------------------
Carrying amount at the 135,510 14,133 97,931 13,275
end of the period
--------------------------------------------------------------------------------
Intangible assets excluding goodwill.
CHANGES IN INTEREST-BEARING LIABILITIES
2016 2015
--------------------------------------------------------------------------------
Total interest-bearing liabilities at the beginning of the 96,862 85,014
period
--------------------------------------------------------------------------------
Current liabilities at the beginning of the period 3,363 3,347
--------------------------------------------------------------------------------
Repayment of current liabilities -3,358 -3,347
Drawdown of current liabilities 102 3,363
Reclassification from non-current liabilities 7,899 −
Exchange rate difference -84 −
Current liabilities at the end of the period 7,923 3,363
--------------------------------------------------------------------------------
Non-current liabilities at the beginning of the period 18,498 6,667
--------------------------------------------------------------------------------
Repayment of non-current liabilities − -6,667
Drawdown of non-current liabilities 368 18,498
Reclassification to current liabilities -7,899 −
Exchange rate difference 607 −
--------
Non-current liabilities at the end of the period 11,574 18,498
--------------------------------------------------------------------------------
Debentures at the beginning of the period 75,000 75,000
--------------------------------------------------------------------------------
Debentures at the end of the period 75,000 75,000
--------------------------------------------------------------------------------
Total interest-bearing liabilities at the end of the period 94,497 96,862
--------------------------------------------------------------------------------
In accordance with IAS 32, the hybrid bond is included in equity.
CONTINGENT LIABILITIES
Guarantees 31 Dec 31 Dec
2016 2015
--------------------------------------------------------------------------------
Guarantees on own committments 16,810 18,487
Other own commitments 4,036 4,620
Guarantees on behalf of others 963 4,134
Total 21,841 27,241
--------------------------------------------------------------------------------
Other contingencies
--------------------------------------------------------------------------------
Contractual commitments to acquire property, plant and 5,517 16,083
equipment
--------------------------------------------------------------------------------
Total 5,517 16,803
--------------------------------------------------------------------------------
Minimum lease payments under non-cancellable operating leases in
future periods
--------------------------------------------------------------------------------
Within one year 3,808 3,381
Between 1-5 years 3,853 4,971
After 5 years 5,427 4,489
Total 13,088 12,841
--------------------------------------------------------------------------------
NOMINAL AND FAIR VALUES OF DERIVATIVE INSTRUMENTS
31 Dec 2016 31 Dec 2015
----------------------------------------------------
EUR thousand Nominal value Fair value Nominal Fair value
value
--------------------------------------------------------------------------------
Currency forward contracts
--------------
hedge accounting applied 5,240 -327 16,114 -267
--------------
hedge accounting not 2,396 30 3,196 -30
applied
--------------
Electricity forward
contracts
--------------
hedge accounting applied 594 43 1,229 -242
--------------
FINANCIAL ASSETS BY CATEGORY
a. Fair value through profit or loss
b. Loans and receivables
c. Available-for-sale assets
d. Derivatives, hedge accounting applied
e. Carrying amount
f. Fair value
Classification
EUR thousands a. b. c. d. e. f.
--------------------------------------------------------------------------------
Available-for-sale assets − − 777 − 777 777
--------
Other non-current receivables 501 − − − 501 501
--------
Loan receivables − 8,386 − − 8,386 8,386
--------
Trade receivables − 53,946 − − 53,946 53,946
--------
Derivatives 30 − − 43 73 73
---------
Interest and other financial − 869 − − 869 869
receivables
--------
Cash and cash equivalents − 29,522 − − 29,522 29,522
--------------------------------------------------------------------------------
Total 31.12.2016 530 92,723 777 − 94,072 94,072
--------------------------------------------------------------------------------
EUR thousands a. b. c. d. e. f.
--------------------------------------------------------------------------------
Available-for-sale assets − − 777 − 777 777
--------
Other non-current receivables 813 − − − 813 813
--------
Loan receivables − 8,793 − − 8,793 8,793
--------
Trade receivables − 51,547 − − 51,547 51,547
--------
Interest and other financial − 1,297 − − 1,297 1,297
receivables
--------
Cash and cash equivalents − 55,570 − − 55,570 55,570
--------------------------------------------------------------------------------
Total 31.12.2015 813 117,207 777 − 118,797 118,797
--------------------------------------------------------------------------------
Principles in estimating fair value for financial assets for 2016 are the same
as those used in consolidated financial statements for 2015.
FINANCIAL LIABILITIES
31.12.2016 31.12.2015
EUR thousands Carrying Fair Carrying Fair
amount value amount value
--------------------------------------------------------------------------------
Non-current financial liabilities
Loans from financial institutions 11,294 11,294 18,498 18,498
Debentures 75,000 78,503 75,000 77,175
Finance lease liabilities 280 280 − −
Other non-current liabilities − − 368 368
--------------------------------------------------------------------------------
Total non-current financial 86,574 90,076 93,866 96,041
liabilities
Current financial liabilities
Current part of non-current loans from 7,812 7,812 3,363 3,363
financial institutions
Finance lease liabilities 111 111 − −
Derivatives, no hedge accounting − − 30 30
applied
Derivatives, hedge accounting applied 327 327 509 509
Interest accruals 912 912 914 914
Other current liabilities 253 253 262 262
Trade payables 50,248 50,248 44,682 44,682
--------------------------------------------------------------------------------
Total current financial liabilities 59,662 59,662 49,761 49,761
Total 146,236 149,739 143,627 145,802
Principles in estimating fair value for financial liabilities for 2016 are the
same as those used in consolidated financial statements for 2015.
FAIR VALUE MEASUREMENT HIERARCHY
Fair value hierarchy in 2016
Financial assets at fair value Level 1 Level 2 Level 3
--------------------------------------------------------------
Other non-current receivables − − 501
Available-for-sale assets − − 777
Electricity derivatives − 43 −
Currency derivatives − 30 −
--------------------------------------------------------------
Total in 2016 − 73 1,277
--------------------------------------------------------------
Financial liabilities at fair value
--------------------------------------------------------------
Other current liabilities − − 253
Currency derivatives − 327 −
--------------------------------------------------------------
Total in 2016 − 327 253
--------------------------------------------------------------
Fair value hierarchy in 2015
Financial assets at fair value
--------------------------------------------------------------
Other non-current receivables − − 813
Available-for-sale assets − − 777
Electricity derivatives − − −
--------------------------------------------------------------
Total in 2015 − − 1,590
--------------------------------------------------------------
Financial liabilities at fair value
--------------------------------------------------------------
Other non-current liabilities − − 368
Other current liabilities − − 262
Currency derivatives − 297 −
Electricity derivatives − 242 −
--------------------------------------------------------------
Total in 2015 − 539 630
--------------------------------------------------------------
Principles in estimating fair values in 2016 are the same as those used in
consolidated financial statements for 2015.
SUOMINEN CORPORATION
Board of Directors
For further information, please contact:
Nina Kopola, President & CEO, tel +358 10 214 300
Tapio Engström, CFO, tel. +358 10 214 300
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 over 600 people in Europe and in the Americas.
Suominen’s net sales in 2016 amounted to EUR 416.9 million and comparable
operating profit to EUR 25.6 million. The Suominen share (SUY1V) is listed in
Nasdaq Helsinki Stock Exchange (Mid Cap). Read more at www.suominen.fi.
Distribution:
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