2016-04-28 07:00:02 CEST
2016-04-28 07:00:02 CEST
REGULATED INFORMATION
Suominen Oyj - Interim report (Q1 and Q3)
Suominen Corporation's Interim Report for January 1-March 31, 2016:Cash flow from operations improved markedly, net sales and operating profit declined, guidance for full year remains unchanged
Helsinki, Finland, 2016-04-28 07:00 CEST (GLOBE NEWSWIRE) -- Suominen
Corporation Interim Report 28 April 2016 at 8:00 am (EEST)
Suominen Corporation’s Interim Report for January 1 - March 31, 2016:
Cash flow from operations improved markedly, net sales and operating profit
declined, guidance for full year remains unchanged
KEY FIGURES 1-3/2016 1-3/2015 1-12/201
5
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Net sales, EUR million 103.9 111.9 444.0
Operating profit excluding non-recurring items, 5.5 7.3 31.2
EUR million
Operating profit, EUR million 5.5 7.3 31.8
Profit for the period, EUR million 3.4 3.5 17.0
Earnings per share, basic, EUR* 0.06 0.06 0.32
Earnings per share, diluted, EUR* 0.06 0.06 0.29
Cash flow from operations per share, EUR* 0.18 0.09 0.54
Return on invested capital, rolling 12 months, % 14.7 14.8 15.9
Gearing, % 28.6 33.2 25.9
*Adjusted due to the reverse share split.
Highlights in January–March 2016:
- Net sales decreased by 7.2% and amounted to EUR 103.9 million (111.9).
- Operating profit decreased by 24.0% to EUR 5.5 million (7.3).
- Cash flow from operations increased to EUR 9.1 million (4.5).
- Both financial targets monitored on a quarterly basis, return on invested
capital and gearing ratio, surpassed their target levels.
- The execution of the growth investment program focused on the new production
line to be built at the Bethune plant.
- Suominen carried out a reverse share split with 5:1 ratio.
- The Annual General Meeting decided to distribute in total EUR 5.0 million as
dividends.
- Suominen repeats its previous estimate, disclosed on 29 January 2016, that
for the full year 2016 the company expects its net sales and operating profit
excluding non-recurring items to improve from year 2015. In 2015, Suominen’s
net sales amounted to EUR 444.0 million and operating profit excluding
non-recurring items to EUR 31.2 million. The non-recurring items are explained
in the disclosures of this Interim Report.
Nina Kopola, President & CEO, comments on Suominen’s first quarter of 2016:
“In the first quarter of 2016, the consumer confidence index in the euro zone
fell short of its level of the first quarter of 2015, but remained above the
long-term average. In the United States, the consumer confidence index showed
relatively stable development, but remained slightly below the level of the
comparison period. Europe and North America are Suominen’s largest market
areas.
Suominen’s first-quarter net sales decreased from the comparison period to EUR
103.9 million. As we reported earlier, demand was not at the same level as in
the comparison period. This also affected the competitive situation in the
markets. However, the situation is believed to be temporary and to have mostly
resulted from new capacity that has recently been built in our main market
areas. We saw signs of improvement in demand already towards the end of the
review period. Overall, we expect demand growth in our target markets to
continue in 2016 at the same level as in 2015 on average.
Suominen’s operating profit decreased from the comparison period to EUR 5.5
million. However, the profit for the reporting period remained more or less
unchanged, thanks mainly to lower financial expenses. Suominen’s cash flow from
operations doubled from the comparison period to EUR 9.1 million.
There’s three financial targets set for Suominen: organic net sales growth,
return on invested capital and gearing ratio. The last two are monitored
quarterly and organic growth on an annual basis. Of the financial targets
monitored on a quarterly basis, return on invested capital was 14.7%, exceeding
the target level of over 12%. Our gearing ratio remained below the target range
of 40–80%, at 28.6%.
During the reporting period, Suominen’s Annual General Meeting decided to merge
Suominen’s shares in a reverse share split using a split ratio of 5 to 1. The
purpose of merging the shares is to raise interest in the company’s shares, to
facilitate trade in the shares and to increase flexibility in defining the
amount of dividend.
The Annual General Meeting also decided that a dividend of EUR 0.02 per share
(prior to the reverse share split) was to be paid for the financial year 2015,
which means that the shareholders were distributed double the amount of funds
compared to the previous financial year.
Suominen continues to consistently implement its strategy. Our product
portfolio developed in line with our targets, as the proportion of sales of
products with higher added value grew by 3 percentage points. During the
reporting period, we also strengthened our R&D team further with three new
hires and continued our 60-million-euro growth investment program. Our
modernized plants in Alicante and Paulínia have delivered their first orders
and now we are focusing on the new production line being built at our plant in
Bethune, SC, United States. The goal is for the equipment installations for the
investment in Bethune to be completed during the second half of this year,
according to the schedule announced earlier.”
NET SALES
In January–March 2016, Suominen’s net sales fell by 7.2% from the comparison
period to EUR 103.9 million (111.9). Net sales were affected by both decreased
sales volumes and lower sales prices, in approximately equal proportions. The
demand was not at the level of the comparison period which also affected the
competitive situation. Suominen expects the situation to be temporary and saw
signs of improvement in demand already towards the end of the review period.
Overall, the growth in the demand in Suominen’s target markets in 2016 is
expected to continue, on average, at the pace of 2015. The changes in US dollar
exchange rate had no material effect on the net sales during the first quarter.
Suominen has two business areas, Convenience and Care. Convenience business
area supplies nonwovens as roll goods for wiping products. Care business area
manufactures nonwovens for hygiene products and medical applications. Net sales
of the Convenience business area were EUR 95.5 million (102.6) and net sales of
the Care business area EUR 8.3 million (8.8).
The main application areas for nonwoven materials supplied by Suominen in
January–March 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%). All nonwovens for wiping products belong to the
Convenience business area and nonwovens for hygiene and medical products to the
Care business area.
The share of baby wipes in the net sales decreased from the corresponding
period by three percentage points. Of the products with higher added value,
nonwovens for personal care and for household wipes increased their shares in
the portfolio. The changes in the portfolio were in line with Suominen’s
strategy.
OPERATING PROFIT AND RESULT
Operating profit decreased by 24.0% and amounted to EUR 5.5 million (7.3).
Lower sales volumes and decrease in gross profit affected operating profit.
There was no material effect of US dollar exchange rate fluctuation on
operating profit during the first quarter.
Profit before income taxes was EUR 5.3 million (5.7), and profit for the
reporting period was EUR 3.4 million (3.5). Decrease in financial expenses
improved the profit for the period.
FINANCING
The Group’s net interest-bearing liabilities amounted to EUR 34.5 million
(38.2) at the end of the review period. The gearing ratio was 28.6% (33.2%) and
the equity ratio 42.6% (42.1%).
In January–March, net financial expenses were EUR -0.2 million (-1.6), or 0.2%
(1.4%) of net sales. Fluctuations in exchange rates decreased the financial
items by EUR 0.5 million, while in the comparison period they increased the
financial expenses by EUR 0.7 million.
Cash flow from operations was EUR 9.1 million (4.5), representing a cash flow
per share of EUR 0.18 (0.09). The improvement in the cash flow from operations
was mainly affected by decrease in paid financial items as well as positive
change in working capital. The financial items in the cash flow from
operations, in total EUR -1.8 million (-5.3), were principally impacted by the
interests of the debenture bond paid during the reporting period, while in the
corresponding period in the previous year the paid financial items were
burdened not only by the paid interests of the debenture bond but also by
payments related to currency forward contracts hedging equity. EUR 1.4 million
was freed in working capital (in Q1 2015: tied up 0.1).
In accordance with the decision of the Annual General Meeting held on 16 March
2016, a distribution of dividends (EUR 0.02 per share), in total EUR 5.0
million, was paid on 31 March 2016.
In February 2016, in total EUR 0.9 million of accrued interests of the
convertible hybrid bond issued by Suominen in February 2014 were capitalized to
the bond capital in accordance with the terms of the hybrid bond.
If Suominen distributes dividend before 10 February 2018, the bondholders are
entitled to a compensation equaling to the dividend. The compensation will be
paid the same date as the dividend, and the paid compensation will be deducted
from the interests accrued or to be accrued. The compensation deducted from
interests accrued or to be accrued will decrease the amount of interests
capitalized as principal of the bond and thus the number of shares to be
converted with the bond. In total EUR 0.6 million of interests on hybrid bond
were paid in March 2016 in connection with the payment of dividend.
Bondholders of the convertible hybrid bond issued by Suominen are entitled to
convert the bond notes and the potential accrued capitalized interest related
to the notes into Suominen shares. The conversion rate is EUR 2.50 per share
(after the reverse split of the shares), and the conversion period started on
11 February 2014 and will end on 10 February 2018. The number of shares to be
converted must be at least 40,000 shares. The number of shares in Suominen may
increase in total by maximum of 7,600,320 shares on the basis of the conversion
of the remaining bond notes and the potential capitalized interest, if the
conversion is carried out by issuing new shares in Suominen.
The hybrid bond capital was EUR 15.6 million on 31 March 2016. Suominen has the
right to redeem the bond in whole or in part on 10 February 2018 or thereafter,
on each interest payment date, at the nominal value of the bond together with
the accrued interest.
CAPITAL EXPENDITURE
The gross capital expenditure totaled EUR 3.5 million (1.5) and was mainly
related to the investment in a new production line at the Bethune, SC, USA
plant and to the renewal of ICT systems. Other investments were mainly for
maintenance. Depreciation and amortization for the review period amounted to
EUR 4.6 million (4.4).
INFORMATION ON SHARES AND SHARE CAPITAL
Share capital
After the reverse share split, the number of Suominen’s registered shares was
51,216,232 shares on 31 March 2016, equaling to a share capital of EUR
11,860,056.00.
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). 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 traded on Nasdaq Helsinki from 1
January to 31 March 2016 was 3,576,585 shares, accounting for 7.1% of the
average number of shares (excluding treasury shares). The highest price was EUR
6.20, the lowest EUR 4.00 and the volume-weighted average price EUR 4.90. The
closing price at the end of review period was EUR 4.04. The market
capitalization (excluding treasury shares) was EUR 203.2 million on 31 March
2016.
Treasury shares
On 31 March 2016, Suominen Corporation held 913,866 treasury shares.
Hybrid bond
In February 2014, Suominen Corporation issued a convertible hybrid bond of EUR
17.5 million. The holders of the bond notes are entitled to convert the notes
and the potential 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.
The number of shares in Suominen may increase in total by maximum of 7,600,320
shares on the basis of the conversion of the remaining bond notes and the
potential capitalized interest, if the conversion is carried out by issuing new
shares in Suominen.
The portion of the remuneration of the members of the Board of Directors which
shall be paid in shares
The Annual General Meeting held on 16 March 2016 resolved to maintain the
remuneration of the members of the Board of Directors unchanged. In 2016, the
Chair of the Board of Directors will be paid an annual fee of EUR 50,000,
Deputy Chair of the Board an annual fee of EUR 37,500 and other Board members
an annual fee of EUR 28,000. Further, the members of the Board will receive a
fee of EUR 500 for each meeting held in the home country of respective member
and a fee of EUR 1,000 per each meeting held elsewhere than in the home country
of respective member. 60% of the annual remuneration is paid in cash and 40% in
Suominen Corporation’s shares.
The number of shares forming the above-mentioned remuneration portion payable
in shares will be determined based on the share value in the stock exchange
trading maintained by Nasdaq Helsinki Ltd, 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 is published. The shares will be given out of the treasury
shares held by the company by the decision of the Board of Directors by 3 June
2016 at the latest.
Share-based incentive plans for the management and key employees
The Group management and key employees participate the company’s share-based
incentive plan. The share-based incentive plan is divided into Performance
Share Plan and Matching Share Plan. The plans are described in detail in the
Financial Statements 2015 and in the Remuneration Statement 2015 of Suominen
Corporation, available on the company’s website, www.suominen.fi > Investors >
Corporate Governance.
Due to the reverse share split carried out in the review period, the terms and
conditions of the share-based incentive plans have been technically adjusted.
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.
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. Risto Anttonen was re-elected and Laura Raitio elected
as members.
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.
NOTIFICATIONS UNDER CHAPTER 9, SECTION 5 OF THE SECURITIES MARKET ACT
During the review period Suominen received no notifications under Chapter 9,
Section 5 of the Securities Market Act.
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. Long-term contracts are preferred in the case of the
largest customers. In practice, the customer relationships are long-term and
last for several years.
The 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. The price fluctuations affect Suominen’s financial result
quickly, as the company’s stocks equal to two to four weeks’ consumption and
passing the price changes on to the prices Suominen charges its contract
customers takes between 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 several product
groups, particularly in Europe. If Suominen is not able to compete through an
attractive product offering, it may lose some of its market share, and the
competition may lead to increased pricing pressure on the company’s products.
The Group’s damage risks are insured in order to guarantee the continuity of
operations. Suominen has valid damage and business interruption insurance
according to which it is estimated that the damages can be covered and the
financial losses caused by an interruption compensated.
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 as well as the changes in the forecasted 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.
The Group’s financial risks consist of foreign exchange, interest rate, credit,
counterparty, liquidity and commodity risks. Due to the international scope of
the business, the Group has risks arising from fluctuations in foreign exchange
rates. The effect of changes in interest rate levels on Group result represent
an interest rate risk. Credit and counterparty risks arise mainly from risks
associated with the payment period granted to customers and, in the case of
loan receivables, from the ability of the counterparty to repay the loans.
Liquidity risk is the risk that the Group’s negotiated credit facilities are
insufficient to cover the financial needs of the business or that obtaining new
funding for these needs will cause a significant increase in financing costs.
General risks related to business operations are described in the Report of the
Board of Directors 2015.
BUSINESS ENVIRONMENT
Suominen’s nonwovens are, for the most part, used in daily consumer goods, such
as wet wipes as well as 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.
In the first quarter of 2016, the consumer confidence index in the euro zone
fell short of its level of the first quarter of 2015, but remained above the
long-term average. In the United States, the consumer confidence index showed
relatively stable development, but remained slightly below the level of the
comparison period.
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. As Suominen disclosed earlier, the
demand was not at the level of the comparison period which also affected the
competitive situation. However, the company expects the situation to be
temporary and saw signs of improvement in demand already towards the end of the
review period. At large, the growth in the demand in Suominen’s target markets
in 2016 is expected to continue, on average, at the pace of 2015.
OUTLOOK FOR 2016
Suominen repeats its previous estimate, disclosed on 29 January 2016, that for
the full year 2016 the company expects its net sales and operating profit
excluding non-recurring items to improve from year 2015.
In 2015, Suominen’s net sales amounted to EUR 444.0 million and operating
profit excluding non-recurring items to EUR 31.2 million. The non-recurring
items are explained in the disclosures of this Interim Report.
ANALYST AND PRESS CONFERENCE
Nina Kopola, President & CEO, and Tapio Engström, CFO, will present Suominen’s
financial result for Q1 2016 in Finnish at an analyst and press conference in
Helsinki today on 28 April at 11:00 am (EEST). The conference will take place
at Suominen’s Helsinki office, address Itämerentori 2. The presentation
material will be available after the analyst and press conference at
www.suominen.fi.
A teleconference and a webcast on the Q1 2016 financial result will be held
today on 28 April at 3:00 pm (EEST). The conference can be attended by phone at
+44 20 3059 8125 (password: Suominen) and it is held in English. The conference
can be accessed also at www.suominen.fi (Investors > Materials > Webcasts).
A replay of the conference can be accessed shortly after the conference has
ended at www.suominen.fi or by phone at +44 121 260 4861, using access code
3070045#.
NEXT INTERIM REPORT
Suominen Corporation will publish its Interim report for January–June 2016 on
Tuesday, 9 August 2016 approximately at 12:00 noon (EEST).
SUOMINEN GROUP 1 JANUARY–31 MARCH 2016
This interim report has been prepared in accordance with the principles defined
in IAS 34 Interim Financial Reporting. The principles for preparing the interim
report are the same as those used for preparing the consolidated financial
statements for 2015. Changes to published accounting standards and
interpretations, together with the new accounting standards that came into
force on 1 January 2016, are presented in the consolidated financial statements
for 2015.
The figures in these interim financial statements are mainly presented in EUR
thousands. As a result of rounding differences, the figures presented in the
tables do not necessarily add up to total.
This interim report has not been audited.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR thousands 31.3.2016 31.3.2015 31.12.2015
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Assets
Non-current assets
Goodwill 15,496 15,496 15,496
Intangible assets 13,411 12,598 13,275
Property, plant and equipment 94,173 92,197 97,931
Loan receivables 7,793 8,202 7,793
Available-for-sale assets 777 1,113 777
Held-to-maturity investments − 433 −
Other non-current receivables 2,442 2,518 2,402
Deferred tax assets 4,529 5,276 4,491
--------------------------------------------------------------------------------
Total non-current assets 138,621 137,833 142,165
Current assets
Inventories 31,816 30,914 32,557
Trade receivables 52,151 60,599 51,547
Loan receivables 1,000 600 1,000
Other current receivables 5,183 4,108 7,038
Assets for current tax 1,892 1,381 1,874
Cash and cash equivalents 53,065 38,036 55,570
--------------------------------------------------------------------------------
Total current assets 145,107 135,639 149,585
Total assets 283,728 273,472 291,750
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
Share capital 11,860 11,860 11,860
Share premium account 24,681 24,681 24,681
Reserve for invested unrestricted equity 69,652 69,572 69,652
Treasury shares -44 -44 -44
Fair value and other reserves 500 14 -118
Exchange differences 1,660 8,216 5,097
Other equity -4,775 -15,901 -3,076
--------------------------------------------------------------------------------
Total equity attributable to owners of the 103,534 98,398 108,052
parent
Hybrid bond 17,272 16,653 17,664
--------------------------------------------------------------------------------
Total equity 120,806 115,051 125,716
Liabilities
Non-current liabilities
Deferred tax liabilities 10,411 9,832 10,890
Liabilities from defined benefit plans 1,105 1,151 1,105
Other non-current liabilities 258 1,303 651
Debentures 75,000 75,000 75,000
Other non-current interest-bearing liabilities 18,058 6,667 18,498
--------------------------------------------------------------------------------
Total non-current liabilities 104,831 93,953 106,144
Current liabilities
Current interest-bearing liabilities 3,318 3,333 3,363
Liabilities for current tax 764 941 47
Trade payables and other current liabilities 54,010 60,194 56,479
--------------------------------------------------------------------------------
Total current liabilities 58,092 64,468 59,889
Total liabilities 162,923 158,421 166,034
Total equity and liabilities 283,728 273,472 291,750
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
EUR thousands 1-3/2016 1-3/2015 1-12/2015
-----------------------------------------------------------
Net sales 103,869 111,934 444,042
Cost of goods sold -92,077 -97,547 -386,042
-----------------------------------------------------------
Gross profit 11,792 14,387 58,000
Other operating income 629 950 2,637
Sales and marketing expenses -1,758 -1,902 -7,760
Research and development -837 -851 -3,527
Administration expenses -4,339 -4,681 -16,709
Other operating expenses 55 -611 -862
-----------------------------------------------------------
Operating profit 5,543 7,292 31,778
Net financial expenses -244 -1,621 -5,302
-----------------------------------------------------------
Profit before income taxes 5,299 5,671 26,476
Income taxes -1,858 -2,188 -9,456
-----------------------------------------------------------
Profit for the period 3,441 3,482 17,020
-----------------------------------------------------------
Earnings per share, EUR
Basic 0.06 0.06 0.32
Diluted 0.06 0.06 0.29
-----------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR thousands 1-3/20 1-3/20 1-12/2
16 15 015
--------------------------------------------------------------------------------
Profit for the period 3,441 3,482 17,020
Other comprehensive income:
Other comprehensive income that will be subsequently
reclassified to profit or loss
Exchange differences -3,933 5,301 2,356
Fair value changes of cash flow hedges and 618 -127 -970
available-for-sale assets
Reclassified to profit or loss -17 25 669
Reclassified to property, plant and equipment − − 91
Income taxes related to other comprehensive income 514 -431 -632
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Total -2,819 4,768 1,514
Other comprehensive income that will not be subsequently
reclassified to profit or loss
Remeasurements of defined benefit plans − − -26
Income taxes related to other comprehensive income − − 8
--------------------------------------------------------------------------------
Total − − -18
Total comprehensive income for the period 622 8,250 18,516
--------------------------------------------------------------------------------
CONSOLIDATED 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 − − − − -3,437
comprehensive
income
--------------------------------------------------------------------------------
Total − − − − -3,437
comprehensive
income
Share-based − − − − −
payments
Dividend − − − − −
distribution
Hybrid bond − − − − −
Equity 31 11,860 24,681 69,652 -44 1,660
March 2016
--------------------------------------------------------------------------------
EUR thousands Fair value Other equity Total Hybrid Total
and other bond equity
reserves
--------------------------------------------------------------------------------
Equity 1 -118 -3,076 108,052 17,664 125,716
January 2016
--------------------------------------------------------------------------------
Profit / loss − 3,441 3,441 − 3,441
for the period
Other 618 − -2,819 − -2,819
comprehensive
income
--------------------------------------------------------------------------------
Total 618 3,441 622 − 622
comprehensive
income
Share-based − 75 75 − 75
payments
Dividend − -5,030 -5,030 − -5,030
distribution
Hybrid bond − -185 -185 -393 -578
Equity 31 March 500 -4,775 103,534 17,272 120,806
2016
--------------------------------------------------------------------------------
EUR Share capital Share Reserve for Treasu Exchange
thousands premium invested ry difference
account unrestricted shares s
equity
--------------------------------------------------------------------------------
Equity 1 11,860 24,681 97,192 -44 3,419
January
2015
--------------------------------------------------------------------------------
Profit / − − − − −
loss for
the period
Other − − − − 4,849
comprehensi
ve income
--------------------------------------------------------------------------------
Total − − − − 4,849
comprehensi
ve income
Share-based − − − − −
payments
Share issue − − 340 − −
Distribution − − -2,504 − −
of funds
Reclassifica − − -27,448 − -51
tions
Conversion − − 1,992 − −
of hybrid
bond
Hybrid bond − − − − −
Equity 31 11,860 24,681 69,572 -44 8,216
March 2015
--------------------------------------------------------------------------------
EUR Fair value and Other Total Hybrid Total
thousands other reserves equity bond equity
--------------------------------------------------------------------------------
Equity 1 96 -46,890 90,314 18,424 108,737
January
2015
--------------------------------------------------------------------------------
Profit / − 3,482 3,482 − 3,482
loss for
the period
Other -81 − 4,768 − 4,768
comprehensi
ve income
--------------------------------------------------------------------------------
Total -81 3,482 8,250 − 8,250
comprehensi
ve income
Share-based − 183 183 − 183
payments
Share issue − − 340 − 340
Distribution − − -2,504 − -2,504
of funds
Reclassifica − 27,499 − − −
tions
Conversion − − 1,992 -1,992 −
of hybrid
bond
Hybrid bond − -177 -177 221 44
Equity 31 14 -15,901 98,398 16,653 115,051
March 2015
--------------------------------------------------------------------------------
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
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR thousands 1-3/201 1-3/201 1-12/20
6 5 15
--------------------------------------------------------------------------------
Cash flow from operations
Profit / loss for the period 3,441 3,482 17,020
Total adjustments to profit / loss for the period 6,852 8,319 32,870
--------------------------------------------------------------------------------
Cash flow before changes in net working capital 10,292 11,802 49,890
Change in net working capital 1,368 -107 -7,921
Financial items -1,828 -5,317 -6,425
Income taxes -714 -1,886 -8,269
--------------------------------------------------------------------------------
Cash flow from operations 9,118 4,493 27,274
Cash flow from investments
Investments in property, plant and equipment and -3,849 -1,664 -22,369
intangible assets
Cash flow from disposed businesses − − 167
Sales proceeds from property, plant and equipment and − 10 10
intangible assets
--------------------------------------------------------------------------------
Cash flow from investments -3,849 -1,654 -22,192
Cash flow from financing
Drawdown of other non-current interest-bearing − − 15,000
liabilities
Repayment of other non-current interest-bearing − − -3,333
liabilities
Changes in current interest-bearing liabilities − -14 -14
Changes in loan receivables − − 600
Share issue − 340 340
Paid interest on hybrid bond -624 − −
Dividend distribution / distribution of funds -5,030 -2,504 -2,504
--------------------------------------------------------------------------------
Cash flow from financing -5,654 -2,177 10,089
Change in cash and cash equivalents -385 662 15,171
Cash and cash equivalents at the beginning of the 55,570 38,430 38,430
period
Effect of changes in exchange rates -2,120 -1,056 1,968
Change in cash and cash equivalents -385 662 15,171
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 53,065 38,036 55,570
--------------------------------------------------------------------------------
KEY RATIOS
1-3/2016 1-3/2015 1-12/2015
--------------------------------------------------------------------------------
Change in net sales, % * -7.2 13.8 10.5
Gross profit, as percentage of net 11.4 12.9 13.1
sales, %
Gross profit excluding 11.4 12.9 12.9
non-recurring items, as
percentage of net sales, %
Operating profit, as percentage of 5.3 6.5 7.2
net sales, %
Operating profit excluding 5.3 6.5 7.0
non-recurring items, as
percentage of net sales, %
Net financial items, as percentage -0.2 -1.4 -1.2
of net sales, %
Profit before income taxes, as 5.1 5.1 6.0
percentage of net sales, %
Profit for the period, as 3.3 3.1 3.8
percentage of net sales, %
Gross capital expenditure, EUR 3,527 1,459 23,660
thousands
Depreciation, amortization, 4,602 4,386 17,684
impairment losses and reversal of
impairment losses, EUR thousands
Return on equity, % 14.1 5.3 14.4
Return on invested capital, 14.7 14.8 15.9
rolling 12 months, %
Equity ratio, % 42.6 42.1 43.2
Gearing, % 28.6 33.2 25.9
Earnings per share, EUR, basic ** 0.06 0.06 0.32
Earnings per share, EUR, diluted 0.06 0.06 0.29
*'
Cash flow from operations per 0.18 0.09 0.54
share, EUR **
Equity per share, EUR ** 2.40 2.29 2.50
Number of shares, end of period, 50,302,346 50,072,955 50,302,346
excluding treasury shares **
Share price, end of period, EUR ** 4.04 5.60 6.20
Share price, period low, EUR ** 4.00 3.75 3.75
Share price, period high, EUR ** 6.20 5.75 6.65
Volume weighted average price 4.90 4.55 5.05
during the period, EUR **
Market capitalization, EUR million 203.2 280.4 311.9
Number of traded shares during the 3,576,585 11,096,285 19,502,550
period **
Number of traded shares during the 7.1 22.4 38.9
period, % of average number of
shares
* Compared with the corresponding period in the previous
year.
** Comparative information adjusted with the effects of
the reverse share split
31.3.2016 31.3.2015 31.12.2015
Interest-bearing net debt, EUR thousands
Non-current interest-bearing liabilities 93,058 81,667 93,498
Current interest-bearing liabilities 3,318 3,333 3,363
Interest-bearing receivables and cash -61,858 -46,838 -64,363
and cash equivalents
--------------------------------------------------------------------------------
Interest-bearing net debt 34,517 38,162 32,499
--------------------------------------------------------------------------------
DEFINITION OF KEY RATIOS
Definitions of key ratios are presented in the consolidated financial
statements for 2015.
NET SALES BY GEOGRAPHICAL MARKET AREA
EUR thousands 1-3/2016 1-3/2015 1-12/2015
------------------------------------------------------
Finland 545 746 2,724
Rest of Europe 38,950 42,067 159,854
North and South America 62,174 66,726 271,634
Rest of the world 2,199 2,396 9,830
------------------------------------------------------
Total 103,869 111,934 444,042
------------------------------------------------------
QUARTERLY DEVELOPMENT
2016 2015
--------- -----------------
EUR thousands 1-3 10-12 7-9 4-6 1-3
--------------------------------------------------------------------------------
Net sales 103,869 104,244 114,919 112,944 111,934
--------------------------------------------- --------
Operating profit excluding 5,543 4,262 9,763 9,932 7,292
non-recurring items
--------------------------------------------- --------
as % of net sales 5.3 4.1 8.5 8.8 6.5
--------------------------------------------- --------
Non-recurring items − − − 530 −
--------------------------------------------------------------------------------
Operating profit 5,543 4,262 9,763 10,462 7,292
--------------------------------------------- --------
as % of net sales 5.3 4.1 8.5 9.3 6.5
--------------------------------------------- --------
Net financial items -244 -1,358 -1,247 -1,076 -1,621
--------------------------------------------------------------------------------
Profit before income taxes 5,299 2,903 8,517 9,386 5,670
--------------------------------------------- --------
as % of net sales 5.1 2.8 7.4 8.3 5.1
--------------------------------------------------------------------------------
RELATED PARTY INFORMATION
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.
Salaries paid to the related parties during the first quarter of 2016 amounted
to EUR 661 thousands, obligatory pension payments EUR 113 thousands, voluntary
pension payments EUR 46 thousands, and accruals based on share-based incentive
plans EUR 41 thousands.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
31.3.2016 31.3.2015 31.12.2015
---------------------------------------------------------------
EUR thousands Property, Intangi Property, Intangi Property, Intangi
plant and ble plant and ble plant and ble
equipment assets equipment assets equipment assets
--------------------------------------------------------------------------------
--------------------------------------- --------------------
Carrying amount 97,931 13,275 88,721 12,510 88,721 12,510
at the
beginning of
the period
---------------------
Capital 2,741 785 977 482 20,733 2,927
expenditure
---------------------
Disposals − − − -10 − -10
---------------------
Depreciation, -4,026 -572 -3,879 -507 -15,957 -2,257
amortization
and impairment
losses
---------------------
Reversal of − − − − 530 −
impairment
losses
---------------------
Exchange -2,474 -77 6,378 122 3,904 104
differences and
other changes
--------------------------------------------------------------------------------
Carrying amount 94,172 13,411 92,197 12,598 97,931 13,275
at the end of
the period
--------------------------------------------------------------------------------
Goodwill is not included in intangible assets.
CHANGES IN INTEREST-BEARING LIABILITIES
1 000 euroa 1-3/201 1-3/201 1-12/201
6 5 5
--------------------------------------------------------------------------------
Total interest-bearing liabilities at the beginning 96,862 85,014 85,014
of the period
Current liabilities at the beginning of the period 3,363 3,347 3,347
Repayment of current liabilities − -14 -3,347
Draw-down of current liabilities 102 − 3,363
Exchange rate difference -147 − −
--------------------------------------------------------------------------------
Current liabilities at the end of the period 3,318 3,333 3,363
Non-current liabilities at the beginning of the 18,498 6,667 6,667
period
Repayment of non-current liabilities − − -6,667
Draw-down of non-current liabilities 368 − 18,498
Exchange rate difference -808 − −
--------------------------------------------------------------------------------
Non-current liabilities at the end of the period 18,058 6,667 18,498
Debentures at the beginning of the period 75,000 75,000 75,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Debentures at the end of the period 75,000 75,000 75,000
Total interest-bearing liabilities at the end of the 96,376 85,000 96,862
period
--------------------------------------------------------------------------------
In accordance with IAS 32, the hybrid bond is included in equity.
CONTINGENT LIABILITIES
EUR thousands 31.3.2016 31.3.2015 31.12. 2015
--------------------------------------------------------------------------------
Other commitments
Operating leases 16,679 23,157 17,116
Contractual commitments to acquire property, 15,720 − 16,083
plant and equipment
Guarantees
On own behalf 21,220 15,378 18,487
On behalf of others 4,133 4,017 4,134
NOMINAL AND FAIR VALUES OF DERIVATIVE INSTRUMENTS
31.3.2016 31.3.2015 31.12.2015
-----------------------------------------------------
EUR thousands Nominal value Fair Nominal Fair Nominal Fair
value value value value value
--------------------------------------------------------------------------------
Currency forward contracts
--------- ---------
Hedge accounting applied 15,409 390 35,620 -919 16,114 -267
--------- ---------
Hedge accounting not 2,589 24 4,500 -145 3,196 -30
applied
--------- ---------
Electricity forward
contracts
--------- ---------
Hedge accounting applied 1,071 -291 1,782 -171 1,229 -242
--------- ---------
FINANCIAL ASSETS BY CATEGORY
a. Financial assets at 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 813 1,621 − − 2,434 2,434
--------
Loan receivables − 8,793 − − 8,793 8,793
--------
Trade receivables − 52,151 − − 52,151 52,151
--------
Derivatives 34 − − 390 424 424
---------
Interest and other financial − 1,341 − − 1,341 1,341
receivables
--------
Cash and cash equivalents − 53,065 − − 53,065 53,065
--------------------------------------------------------------------------------
Total 31.3.2016 848 116,971 777 390 118,985 118,985
--------
EUR thousands a. b. c. d. e. f.
--------------------------------------------------------------------------------
Available-for-sale assets − − 777 − 777 777
--------
Other non-current receivables 813 1,512 − − 2,326 2,326
--------
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 813 118,719 777 − 120,309 120,309
--------
Principles in estimating fair value for financial assets for 2016 are the same
as those used for preparing the consolidated financial statements for 2015.
FINANCIAL LIABILITIES
31.3.2016 31.12.2015
EUR thousands Carrying Fair Carrying Fair
amount value amount value
--------------------------------------------------------------------------------
Non-current financial liabilities
Loans from financial institutions 17,689 17,689 18,498 18,498
Debentures 75,000 77,588 75,000 77,175
Finance lease liabilities 368 368 − −
Other non-current liabilities − − 368 368
--------------------------------------------------------------------------------
Total non-current financial 93,058 95,645 93,866 96,041
liabilities
Current financial liabilities
Current part of non-current loans from 3,216 3,216 3,363 3,363
financial institutions
Finance lease liabilities 102 102 − −
Derivatives, no hedge accounting 10 10 30 30
applied
Derivatives, hedge accounting applied 291 291 509 509
Interest accruals 96 96 914 914
Other current liabilities 217 217 262 262
Trade payables 44,140 44,140 44,682 44,682
--------------------------------------------------------------------------------
Total current financial liabilities 48,072 48,072 49,761 49,761
Total 141,130 143,717 143,627 145,802
--------------------------------------------------------------------------------
Principles in estimating fair value for financial liabilities for 2016 are the
same as those used for preparing the consolidated financial statements for
2015.
FAIR VALUE MEASUREMENT HIERARCHY
EUR thousands Level 1 Level 2 Level 3
---------------------------------------------------------------------------
Financial assets and liabilities at fair value
Other non-current receivables − − 813
Available-for-sale assets − − 777
Liabilities at fair value through profit or loss − − -217
---------------------------------------------------------------------------
Total − − 1,373
Derivatives at fair value
Currency forward contracts, receivables − 424 −
Currency forward contracts, liabilities − -10
Electricity forward contracts, liabilities − -291 −
---------------------------------------------------------------------------
Total − 133 −
Principles in estimating fair value for financial assets and their hierarchies
for 2016 are the same as those used for preparing the consolidated financial
statements for 2015. There were no transfers in the fair value measurement
hierarchy levels during the reporting period.
NON-RECURRING ITEMS
Non-recurring items are significant transactions which are unusual or
infrequent in nature, like 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 1-3/2016 1-3/2015 1-12/2015
By function
Cost of goods sold − − 530
------------------------------------------------------------
------------------------------------------------------------
Total − − 530
By cost category
Reversal of impairment losses − − 530
------------------------------------------------------------
Total − − 530
Non-recurring items 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.
SUOMINEN CORPORATION
Board of Directors
For additional information, please contact:
Nina Kopola, President & CEO, tel. +358 (0)10 214 300
Tapio Engström, Senior Vice President and CFO, tel. +358 (0)10 214 300
Distribution:
Nasdaq Helsinki
Key media
www.suominen.fi
Suominen in brief
Suominen manufactures nonwovens as roll goods for wipes as well as for medical
and hygiene products. The end products made of Suominen’s nonwovens – wet
wipes, feminine care products and swabs, for instance – bring added value to
the daily life of consumers worldwide. Suominen is the global market leader in
nonwovens for wipes and employs over 600 people in Europe and in the Americas.
Suominen’s net sales in 2015 amounted to EUR 444.0 million and operating profit
excluding non-recurring items to EUR 31.2 million. The Suominen share (SUY1V)
is listed in Nasdaq Helsinki Stock Exchange (Mid Cap). Read more at
www.suominen.fi.
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