2015-01-30 11:00:00 CET
2015-01-30 11:00:05 CET
REGULATED INFORMATION
Suominen Oyj - Financial Statement Release
Suominen Corporation's Financial Statement Release for January 1 - December 31, 2014 : net sales improved, operating profit grew by 37 %
Helsinki, Finland, 2015-01-30 11:00 CET (GLOBE NEWSWIRE) -- Suominen
Corporation Financial Statement Release 30 January 2015 at 12:00 noon (EET)
SUOMINEN CORPORATION'S FINANCIAL STATEMENT RELEASE FOR JANUARY 1 - DECEMBER 31,
2014:
NET SALES IMPROVED, OPERATING PROFIT GREW BY 37 %
KEY FIGURES Q4/ Q4/ Q1-Q4/ Q1-Q4/
2014 2013 2014 2013
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Net sales, EUR million 104.8 89.8 401.8 373.7
Operating profit before 6.2 4.2 26.9 19.4
non-recurring items, EUR million
Operating profit, EUR million 6.1 3.7 25.9 18.9
Profit/loss for the period, 4.8 0.6 10.2 5.7
EUR million, continuing operations
Profit/loss for the period, EUR million, -1.6 -5.2 -21.8
discontinued operations
Profit/loss for the period, 4.8 -0.9 5.0 -16.1
EUR million, total
Earnings/share, EUR, 0.02 0.00 0.04 0.02
continuing operations
Earnings/share, EUR, -0.01 -0.02 -0.09
discontinued operations
Earnings/share, EUR, Group 0.02 0.00 0.02 -0.07
Cash flow from operations/share, 0.04 0.07 0.15 0.09
EUR*
Return on invested capital (ROI), % * 12.0 -0.7 12.0 -0.7
Return on invested capital (ROI), %, continuing 15.7 12.4 15.7 12.4
operations
Gearing, % ** 34.7 96.2 34.7 96.2
Distribution of funds/share** 0.01
* Including discontinued operations.
** Proposal for the Annual General Meeting. The funds would be distributed from
the invested non-restricted equity fund.
All figures in this interim report refer to continuing operations of the Group
unless otherwise stated. The figures are compared with those of the
corresponding period in 2013 unless otherwise stated. In accordance with IFRS
5, the comparison data of the balance sheets have not been revised and,
consequently, include discontinued operations.
Highlights in October- December 2014:
- Net sales increased by 16.6% and amounted to EUR 104.8 million (89.8).
- Operating profit excluding non-recurring items increased by 49.3% to EUR 6.2
million (4.2).
- Suominen published its strategy for 2015 - 2017 aiming at growth and product
leadership.
- To execute the strategy, Suominen initiated a growth investment program. The
first investments will be implemented at Suominen's plants in Paulínia, Brazil
and Alicante, Spain.
- After the end of the review period, Suominen announced it has started to plan
the largest single project of its growth investment program, building of a new
manufacturing line in North America. The value of the investment is not yet
disclosed.
- Suominen expects that for the full year 2015, its net sales and operating
profit excluding non-recurring items will improve from year 2014. In 2014,
Suominen's net sales amounted to EUR 401.8 million and operating profit
excluding non-recurring items to EUR 26.9 million.
- Suominen's Board of Directors proposes to the Annual General Meeting a EUR
0.01per share fund distribution from the financial year 2014, in total
approximately EUR 2.5 million.
President & CEO Nina Kopola comments on Suominen's fourth quarter of 2014 and
full financial year:
“In the fourth quarter, the consumer confidence indices indicated that the
situation in Suominen's main markets of Europe and North America continued to
be divided: In the euro zone, consumer confidence weakened further, whereas in
the US, the slight drop in the index in the third quarter proved temporary, as
at the end of the year consumer confidence reached its highest level since
February 2008.
I am very pleased both with Suominen's fourth quarter and the full financial
year 2014. Suominen's fourth-quarter net sales from continuing operations grew
16.6% on the comparison period and totaled EUR 104.8 million. The positive
development in net sales was influenced by the strengthening US dollar, the
acquisition of the Paulínia plant in February 2014 and the improved demand in
European markets. Net sales for the full year increased 7.5% to EUR 401.8
million.
Suominen's profitability also showed quite positive development. Operating
profit excluding non-recurring items grew nearly 50% in the fourth quarter and
38% in the full financial year compared to the comparison periods and amounted
to EUR 6.2 million in October-December and EUR 26.9 million for the full year.
The share of products with higher added value in Suominen's portfolio grew,
which was reflected in the gross profit as well as in operating profit.
Suominen's substantially lower gearing ratio is further proof of the favorable
development in the company's balance sheet in 2014. The company's debt
repayment capacity and its healthy financial position, both thanks to the good
operative cash flow, facilitated the refinancing.
In 2014, we achieved the targeted level for all of the financial targets set by
the company's Board of Directors in 2012: the return on investments of
continuing operations increased to 15.7% percent (target level >10%) and
gearing ratio fell to 34.7% (target level 40-80%). The third target, organic
net sales growth at a rate faster than the industry average (approx. 3%), was
also achieved. Net sales from Suominen's continuing operations increased
organically 3.5%.
Considering the above-mentioned figures, Suominen is in an excellent position
to embark on a new strategy period. We announced our revised strategy for
2015-2017 in October. Our strategy for the future continues to be based on the
three cornerstones: The Suominen Way, Step Change in Profitability, and In the
Lead. In this new strategy period, however, we will place greater focus on the
In the Lead cornerstone, aiming for growth, a market-driven way of operations
and product leadership.
In the strategy period, we will target a higher return on investments (target
level increased to >12%), a gearing ratio principally between 40-80%, and
organic growth that exceeds the industry average, which is estimated to be
roughly 3% in Suominen's market areas.
In December we announced the launch of our growth investment program to execute
our strategy. As announced, the overall value of the investment program
covering the strategy period is in the region of EUR 30 to 50 million. The
initial projects will target the Alicante and Paulínia plants in Spain and
Brazil respectively. In addition, we confirm that the previously considered
investment project to boost the capacity of the Nakkila plant will be executed
to allow Suominen to flexibly respond to the current market demand. The
combined value of these three growth investments is roughly EUR 4 million, and
they will enhance Suominen's ability to further increase the share of
value-adding products in its portfolio.
After the review period, we announced our plans to build a new production line
in North America. The new production line using wetlaid technology will serve,
in accordance with our strategy, several end use application areas with higher
added value. This investment project is still in the preparation phase; we have
not, for example, selected machine suppliers. For that reason, we have not yet
disclosed the total value of the project. The project is, however, clearly the
most substantial one in our growth investment program.
In connection with the revised strategy, Suominen's Board of Directors
confirmed the dividend policy for the company. Suominen's policy is to
distribute approximately 30% of its profit for the period in annual dividends.
In assessing its proposal for the payment of dividends, the company's Board of
Directors will also consider Suominen's future investment needs and the
solidity of its financial position.
In keeping with the dividend policy, the Board will propose to the Annual
General Meeting a EUR 0.01 per share fund distribution. After a hiatus of
several years, Suominen is again able to distribute funds to its shareholders.
This demonstrates the success of our chosen strategy.”
GROUP NET SALES AND FINANCIAL RESULT (CONTINUING OPERATIONS)
October - December 2014
Suominen has two business areas, Convenience and Care. Convenience business
area supplies nonwovens as roll goods for wiping products. Care business area
manufactures nonwovens for hygiene products and medical applications. Until the
end of the financial year 2013, both business areas were reported in the Wiping
segment. In the interim report for January-March 2014, both business areas were
reported in Nonwovens segment. As from the interim report for January-June
2014, Suominen does not report any segments.
In October-December 2014, Suominen's net sales from continuing operations grew
by 16.6% from the comparison period to EUR 104.8 million (89.8). Net sales of
Convenience business area were EUR 96.5 million and net sales of Care business
area EUR 8.2 million.
Operating profit before non-recurring items increased by 49% and amounted to
EUR 6.2 million (4.2). Operating profit after non-recurring items was EUR 6.1
million (3.7). The non-recurring items reported in the review period amounted
to EUR -0.1 million (-0.5). Profit before taxes was EUR 5.1 million (2.6).
Profit for the period from continuing operations was EUR 4.8 million (0.6) and
from discontinued operations EUR 0.0 million (-1.6). The Group profit for the
period was EUR 4.8 million (-0.9).
If calculated with the average USD exchange rate of October-December 2013, the
operating profit before non-recurring items would have been EUR 5.7 million
(4.2) and after them EUR 5.6 million (3.9).
Healthy demand for nonwovens continued in North American market. In Europe, the
demand for Suominen's products remained at the level of the third quarter. The
increase in net sales was attributable to the strengthened exchange rate of the
USD, the acquisition of the Brazilian unit in February 2014 and the improved
demand in the European markets compared to the corresponding period last year.
The increase in the share of products with higher added value in sales was
mirrored in gross profit and, consequently, in improved operating profit.
Cash flow from operations was EUR 9.3 million (16.3) in October-December.
During the reporting period EUR 2.2 million (EUR 13.5 million released) in
working capital was released.
January - December 2014
In January-December 2014, Suominen's net sales from continuing operations grew
by 7.5% from the comparison period to EUR 401.8 million (373.7).
Net sales of Convenience business area were EUR 369.4 million and net sales of
Care business area EUR 32.3 million. The main application areas for nonwoven
materials supplied by Suominen were baby wipes (accounting for 41% of the
sales), personal care wipes (21%), household wipes (17%), industrial wipes
(11%), and hygiene and medical products (8%). All wiping products belong to the
Convenience business area and all medical and hygiene products belong to the
Care business area. The share of products with higher added value grew in the
portfolio.
Operating profit before non-recurring items from continuing operations
increased by 38% and amounted to EUR 26.9 million (19.4). Operating profit
after non-recurring items was EUR 25.9 million (18.9). The non-recurring items
reported in the review period totaled EUR -1.0 million (-0.5), of which EUR
-1.2 million were costs related to restructuring measures and to the
acquisition of the Brazilian unit; and EUR 0.2 million were items related to
the closing down of the fiber production in Nakkila in 2012. Profit before
taxes was EUR 17.8 million (13.1). Profit for the period from continuing
operations was EUR 10.2 million (5.7) and from discontinued operations EUR -5.2
million (-21.8). The Group profit for the period was EUR 5.0 million (-16.1).
Cash flow from operations was EUR 37.1 million (21.3) in January-December. As
of the beginning of the year, EUR 6.1 million (6.5 released) in working capital
was released.
BUSINESS COMBINATIONS AND DISCONTINUED OPERATIONS
Business combinations
Suominen completed the acquisition of Paulínia plant in Brazil from Ahlstrom
Corporation on 10 February 2014. The Paulínia plant was part of Ahlstrom´s
former Home and Personal business operations, acquired by Suominen in 2011, but
the acquisition of the Brazilian unit was prolonged due to delay in receiving
approval from the authorities and consequent renegotiations. The transaction
was implemented through acquisition of the shares of the local company. The
enterprise value of the transaction was EUR 17.5 million and the final
consideration EUR 19.6 million.
Due to the transaction Suominen's nonwovens business has now a foothold in the
growing South American market region. The acquired plant is the only nonwovens
manufacturing facility utilizing modern spunlace technology in production of
wiping products in Brazil. The plant employs some 40 people and its annual net
sales have amounted approximately to EUR 20 million.
Discontinued operations
Suominen reports in the discontinued operations the Flexibles business area,
sold in July 2014, and Codi Wipes business unit, divested in summer 2013. Prior
to June 2013, Codi Wipes was reported as part of Suominen's Wiping segment and
prior to June 2014 Flexibles business as an individual segment.
The enterprise value of the Flexibles business amounted to EUR 20.3 million,
which includes a contingent consideration of EUR 1.0. At the time of the
closing of the deal, on 14 July 2014, Suominen had a loan receivable of EUR 8.5
million. Suominen retains a minority shareholding of 19.9% in the divested
business. The cash component of the purchase price amounted to EUR 5.7 million.
A revised non-recurring loss of EUR 5.9 million was recognized.
Suominen reported a non-recurring loss totaling EUR 5.2 million in
January-December 2014 in its discontinued operations.
The profit after taxes from discontinued operations was EUR -21.8 million in
January-December 2013.
GROUP PROFIT FOR THE PERIOD (INCLUDING DISCONTINUED OPERATIONS)
The Group profit for October-December 2014 including the discontinued
operations was EUR 4.8 million (-0.9).
The Group profit for January-December 2014 including the discontinued
operations was EUR 5.0 million (-16.1)
FINANCING
In September 2014, Suominen renewed its financing. The syndicated credit
facility withdrawn in 2011 was fully amortized and its mortgages were released.
As a substitute, Suominen issued a bond and agreed of a new syndicated EUR 55
million loan facility with two banks.
On 23 September 2014, Suominen issued a EUR 75 million bond to be listed in the
NASDAQ OMX Helsinki Stock Exchange. Principal amount of each book-entry unit of
the senior unsecured notes is EUR 1,000, with an ISIN code FI40000108576. Each
note will be freely transferable after it has been registered into the
respective book-entry account.
The notes constitute direct and unsecured obligations of Suominen and they are
guaranteed as for own debt by the Guarantors, i.e. subsidiaries of Suominen
Corporation.
The notes bear interest from, and including, September 23, 2014 at the rate of
4.375 percent per annum until 23 September 2019, when the notes shall be repaid
in full at their principal amount.
In connection with issuing the bond, Suominen entered into a syndicated credit
facilities agreement totaling EUR 55 million in September. It consists of a
term loan of EUR 10 million with a maturity of three years; a multicurrency
revolving credit facility of EUR 30 million with a maturity of four years; and
an investment loan of EUR 15 million with a maturity of four years. The
facilities are guaranteed as for own debt by the subsidiaries of Suominen
Corporation.
The Group's interest-bearing net liabilities amounted to EUR 37.8 million
(75.5) at the end of the review period. The gearing ratio was 34.7%.
In January-December, net financial expenses were EUR 8.1 million (5.8), or 2.0%
(1.5%) of net sales. Due to the refinancing and the discontinuing of the hedge
accounting for the interest rate hedging, a non-recurring loss of EUR 0.9
million was recognized. Also the remaining costs of EUR 2.0 million for the
previous syndicated loan were recognized in the financial expenses.
A total of EUR 6.1 million of working capital was released (released 6.5).
Trade receivables amounting to EUR 0.1 million were sold to the bank. The
equity ratio was 41.2% (32.9%). Cash flow from operations was EUR 37.1 million
(21.3), representing a cash flow of EUR 0.15 per share (0.09).
CAPITAL EXPENDITURE
The gross investments of the continued operations totaled EUR 7.1 million
(4.4). Planned depreciation of the continuing operations amounted to EUR 15.6
million (13.9). Suominen invested EUR 1.7 million in capacity expansion of high
value added nonwovens at the Windsor Locks plant in the United States and EUR
1.0 million in intangible assets. Other investments were in maintenance. The
investments of the discontinued operations were EUR 0.6 (1.4) million.
INFORMATION ON SHARES AND SHARE CAPITAL
Share capital
The registered number of Suominen's issued shares totaled 247,934,122 shares on
31 December 2014, equaling to a share capital of EUR 11,860,056.00.
Share trading and price
The number of Suominen Corporation shares traded on NASDAQ OMX Helsinki from 1
January to 31 December 2014 was 97,683,100 shares, accounting for 39.7% of the
share capital and votes. The trading price varied between EUR 0.47 and EUR
0.81. The closing trading price was EUR 0.81, giving the company a market
capitalization of EUR 199,365,788 on 31 December 2014.
Own shares
On 1 January 2014 Suominen Corporation held 1,924,367 of its own shares. On 5
June 2014, the portion of the remuneration of the Board of Directors to be paid
in shares, in total 120,848 shares, was delivered in accordance with the
decision by the Annual General Meeting. On 31 December 2014, Suominen held
1,803,519 own shares, accounting for 0.7% of the share capital and votes.
Share-based incentive plan 2012-2014
On 31 December 2014, the target group for Suominen's share-based incentive plan
included seven employees. One employee left the program during the review
period. At the end of the financial period, the rewards to be paid on the basis
of the plan are estimated to correspond to roughly 1,668,333 Suominen
Corporation shares in total, including the portion to be paid in cash. The aim
of the plan is to align the objectives of shareholders and key employees in
order to increase the value of the company, to commit the key employees to the
company, and to offer them a competitive reward plan based on long-term
shareholding in the company. The plan covers one performance period: the
calendar years 2012-2014. The potential reward from the performance period will
be based on Suominen Group's cumulative Earnings Before Interest, Taxes,
Depreciation and Amortization (EBITDA) and cumulative cash flow, and it will be
paid in 2015 partly in company shares and partly in cash.
Management incentive plan 2015 - 2017
The Board of Directors of Suominen Corporation approved on 4 December 2014 two
new share-based incentive plans for the Group management and Group key
employees. The aim of the new plans is to combine the objectives of the
shareholders and the persons participating in the plans in order to increase
the value of the Company in the long-term, to bind the participants to the
Company, and to offer them competitive reward plans based on earning and
accumulating the Company´s shares.
Performance Share Plan 2015
The new Performance Share Plan includes one performance period, calendar years
2015—2017. The Board of Directors will decide on further performance periods.
The Board of Directors of the Company will decide on the Plan's performance
criteria and required performance levels for each criterion at the beginning of
a performance period. The Performance Share Plan is directed to approximately
15 people. The potential reward of the Plan from the performance 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 2,300,000 Suominen Corporation
shares (including also the proportion to be paid in cash). 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.
Matching Share Plan 2015
The new Matching Share Plan includes one three-year performance 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´ 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 550,000 Suominen Corporation shares (including
also the proportion to be paid in cash). In order to implement the Matching
Share Plan, the Board of Directors resolved on a share issue against payment
directed to the target group.
Reward payment and ownership obligation for the management
The potential rewards from the performance periods 2015—2017 will be paid
partly in the Company's shares and partly in cash in 2018. 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.
A member of the Corporate Executive Team must hold 50% of the net number of
Shares given on the basis of the Plans, as long as his or her shareholding in
total corresponds to the value of half of his or her annual gross salary. The
President & CEO of the Company must hold 50% of the net number of Shares given
on the basis of the Plans, as long as his or her shareholding in total
corresponds to the value 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.
Extraordinary General Meeting and hybrid bond
Suominen issued on 10 February 2014 a convertible hybrid bond of EUR
17,500,000, treated as equity, to finance the acquisition of the nonwovens
business operations in Brazil. The bond was oversubscribed. The bond consists
of 175 bond notes, each having the nominal value of EUR 100,000. The bond does
not have a guarantee or other collateral. The principal of the bond has a fixed
annual interest of 5.95% until 10 February 2018. After that date, the principal
of the bond will have a fixed annual interest of 6.95% until 10 February 2019.
After that date, the principal of the bond will have a fixed annual interest of
7.95%. The interest accrued for the bond by 10 February 2018 will be
capitalized to the principal of the bond annually on 10 February. Thereafter
and commencing on 10 May 2018, the interest is payable in the discretion of the
Board of Directors quarterly on 10 February, 10 May, 10 August and 10 November.
No interest shall be paid on the capitalized interest until 10 February 2018.
After that date, the capitalized interest shall be a part of the actual
principal of the bond and annual interest shall be paid to the whole amount of
the principal according to the interest terms of the bond.
Suominen has the right to redeem the bond in whole or in part on 10 February
2018 or thereafter, on each interest payment date, at the nominal value of the
bond together with the accrued interest.
A bond note entitles the bondholder to convert the bond note and the potential
capitalized interest for shares in Suominen at the conversion rate of EUR 0.50
per share. The period for converting starts on 11 February 2014 and ends on 10
February 2018. The number of shares to be received through the conversion must
always be at least 200,000. If the total value of the bond including interest
accrued were converted through an issue of new shares, the number of shares in
Suominen might increase by no more than 43,330,000 on the basis of the
conversion.
The conversion rate shall be recorded under the invested non-restricted equity
fund.
A precondition for issuing the hybrid bond was a resolution made by the
Extraordinary General Meeting (EGM) held on 31 January 2014, according to which
the Board of Directors of the company was authorized to decide on the granting
of stock options and other special rights entitling to shares referred to in
Chapter 10, Section 1 of the Companies Act. The special rights carry the right
to receive against payment new shares in the company or own shares held by the
company. A special right may also be granted to a creditor of the company on
the condition that the creditor´s receivables are used to set off against the
subscription price of shares. The maximum number of new shares that may be
subscribed and/or own shares held by the company that may be conveyed by virtue
of the special rights granted by the company is 43,333,000 shares in total.
The EGM authorized the Board of Directors of Suominen to decide on all terms
and conditions related to granting the special rights. The authorization is
valid until further notice, however no longer than five years from the date of
the authorization given by the general meeting. The authorizations did not
revoke any earlier decisions regarding granting of stock options and other
special rights entitling to shares.
Annual General Meeting
The Annual General Meeting (AGM) of Suominen Corporation was held on 26 March,
2014. The AGM decided that no dividend will be paid for the financial year
2013.
The AGM adopted the financial statements and the consolidated financial
statements for the financial year 2013 and discharged the members of the Board
of Directors and the President & CEO from liability.
The AGM confirmed the number of members of the Board of Directors to be five
(5). The AGM re-elected Mr Risto Anttonen, Mr Jorma Eloranta, Ms Suvi Hintsanen
and Mr Hannu Kasurinen as members of the Board of Directors, and elected Ms
Jaana Tuominen as a new member of the Board of Directors for the next term of
office, expiring at the end of the first Annual General Meeting following their
election. The remuneration of the members of the Board of Directors was
resolved to maintain unchanged. The resolutions were in accordance with the
proposals submitted by the Nomination Board of Suominen's shareholders. In its
constitutive meeting, the Board of Directors elected Jorma Eloranta as its
Chair and Risto Anttonen as Deputy Chair. PricewaterhouseCoopers Oy, Authorized Public Accountants, was re-elected as
auditor, with Heikki Lassila, Authorized Public Accountant, as the principal
auditor of Suominen Corporation.
The AGM authorized the Board of Directors to decide on the repurchase of the
company's own shares and to decide on a share issue and issuance of special
rights entitling to shares referred to in Chapter 10, Section 1 of the
Companies Act.
Nomination Board
In accordance with the decision taken by the Annual General Meeting of Suominen
Corporation, the representatives notified by the company's three largest
shareholders were appointed to Suominen Corporation's permanent Nomination
Board. The shareholders entitled to appoint members to the Nomination Board
were determined on the basis of the registered holdings in the company's
shareholders' register on 1 September 2014.
The representatives appointed to the Nomination Board on 2 September 2014 were
Marco Levi, President & CEO of Ahlstrom Corporation; Timo Ritakallio, Deputy
CEO of Ilmarinen Mutual Pension Insurance Company; and Reima Rytsölä, Chief
Investment Officer of Varma Mutual Pension Insurance Company. Jorma Eloranta,
Chair of Suominen's Board of Directors, serves as the fourth member of the
Nomination Board. On 23 September 2014, the Nomination Board appointed from
among its members Marco Levi, President & CEO of Ahlstrom Corporation, to act
as the Chairman.
On 7 October 2014 the composition of the Nomination Board changed due to the
change of the largest shareholder of Suominen Corporation after a share
transaction announced. Marco Levi, CEO of Ahlstrom Corporation and Chairman of
the Nomination Board of Suominen, resigned from his position. Mr Thomas
Ahlström, Managing Director of Antti Ahlström Perilliset Oy and a member of the
Board of Directors at Ahlström Capital Oy, was nominated to represent AC Invest
Two B.V. in the Nomination Board on 13 October 2014. Further, the Nomination
Board elected him as the Chairman of the Nomination Board. Other members of the
Nomination Board are Timo Ritakallio, Reima Rytsölä and Jorma Eloranta, as
announced on 2 September 2014.
Authorizations of the Board of Directors
The Annual General Meeting (AGM) held on 26 March 2014 authorized the Board of
Directors to repurchase a maximum of 3,000,000 of the company's own shares. The
authorization shall be valid until 30 June 2015.
The Board of Directors is also authorized, by the AGM held on 26 March 2014, to
decide on issuing new shares and/or conveying the company's own shares held by
the company and/or granting special rights entitling to shares referred to in
Chapter 10, Section 1 of the Finnish Companies Act. New shares may be issued
and/or company's own shares held by the company or its group company may be
conveyed at the maximum amount of 25,000,000 shares in aggregate. The maximum
number of new shares that may be subscribed and own shares held by the company
that may be conveyed by virtue of the options and other special rights granted
by the company is 25,000,000 shares in total which number is included in the
maximum number stated earlier. The authorizations revoke the authorizations
decided by the AGM on 26 March 2013 regarding share issue and issuance of
special rights entitling to shares, but do not revoke the authorization decided
by the Extraordinary General Meeting on 31 January 2014 regarding granting of
stock options and other special rights entitling to shares. The authorizations
shall be valid until 30 June 2017.
The portion of the remuneration of the members of the Board of Directors which
shall be paid in shares
The Annual General Meeting (AGM) of Suominen Corporation held on 26 March 2014
resolved to keep the remuneration to the members of the Board of Directors
unchanged. In 2014, the Chair will be paid an annual fee of EUR 50,000, Vice
Chair of the Board an annual fee of EUR 37,500 and other Board members an
annual fee of EUR 28,000. Further, the members of the Board will receive a fee
of EUR 500 for each meeting held in the home country of respective member and a
fee of EUR 1,000 per each meeting held elsewhere than in the home country of
respective member. 60% of the annual remuneration is paid in cash and 40 % in
Suominen Corporation's shares.
The portion of the above remuneration to be paid in shares was delivered on 5
June 2014 by transferring own shares held by Suominen Corporation without
consideration, in accordance with the authorization by the AGM. The transferred
shares are of the same class as the company's other shares. The number of
shares transferred was determined based on the share value in the stock
exchange trading maintained by NASDAQ OMX Helsinki Ltd, and calculated as the
trade volume weighted average quotation of the share during the one month
period immediately following the date on which the interim report of
January-March 2014 of the company was published. In total 120,848 shares were
given out of the own shares held by the company by the decision of the Board of
Directors on 5 June 2014. Since the decision taken by the Board of Directors
was essentially an execution of a detailed resolution taken by the AGM, the
Board did not exercise independent discretion when it decided on the transfer
of the shares.
Permanent committees
After the Annual General Meeting held on 26 March 2014, Suominen Corporation's
Board of Directors decided in its constitutive meeting that the earlier
Remuneration Committee will be altered to Personnel and Remuneration Committee.
Jorma Eloranta was elected as Chair and Risto Anttonen as a member of the
committee.
Hannu Kasurinen was elected as Chair and Suvi Hintsanen and Jaana Tuominen as
members of the Audit Committee.
Notifications under Chapter 9, Section 10 of the Securities Market Act in 1
January - 31 December 2014
During the review period, 1 January - 31 December 2014, Suominen received the
following notifications referred to in Chapter 9, Section 5 of the Securities
Market Act:
Ahlstrom Corporation (business identity code 1670043-1) and AC Invest Two B.V.
(business identity code 51490943) notified Suominen on 7 October 2014 about the
changes in their shareholdings. According to the notifications, AC Invest Two
B.V. acquires in total 66,666,666 Suominen shares from Ahlstrom Corporation,
representing 26.89% of all shares and votes in Suominen Corporation. Due to the
acquisition, the shareholding of AC Invest Two B.V. in Suominen Corporation
exceeds the flagging threshold of 25% and increases into 67,724,176 shares,
corresponding to 27.32% of shares and votes in Suominen Corporation. According
to the notification by AC Invest Two B.V, their earlier shareholding in
Suominen Corporation was below 5% of all shares and votes. According to the
notification by Ahlstrom Corporation, due to the divestment of the shares, the
shareholding of Ahlstrom Corporation in Suominen Corporation decreases to zero
(zero shares and votes). Ahlstrom Corporation's earlier shareholding in
Suominen Corporation was 26.89% of all shares and votes.
Oy Etra Invest Ab, business identity code 0672234-6 notified on 5 February 2014
about an agreement or other arrangement that, if realized, would result in the
crossing of the 5% notification threshold as referred to in the Chapter 9
Section 5 of the Securities Market Act and calculated from the total number of
shares and voting rights. The notification was made for Erkki Etola, Oy Etra
Invest Ab and Tiiviste-Group Oy (business identity code 0115121-4) together.
Erkki Etola has a controlling interest on Oy Etra Invest Ab and Tiiviste-Group
Oy.
Proportion of all shares and voting rights after crossing of the notification
threshold would be:
* Oy Etra Invest Ab: number of shares 15,823,320 and share of all shares and
voting rights 5.43%
* Erkki Etola: number of shares 4,016 and share of all shares and voting rights
0.00%
* Tiiviste-Group Oy: number of shares 3,000,000 and share of all shares and
voting rights 1.03%
Oy Etra Invest Ab, Erkki Etola and Tiiviste-Group Oy in total: number of shares
18,827,336 and share of all shares and voting rights 6.46%
Ahlstrom Corporation (business identity code 1670043-1) notified on 5 February
2014 about an agreement or other arrangement that, if realized, would result in
the acquisition or disposal of shares or voting rights. According to the
notification, the ownership and the voting rights of Ahlstrom Corporation may
decrease so that the following thresholds will be crossed: 25%, 20%, 15%, 10%
or 5%.
Ahlström Capital Oy (business identity code 1670034-3) and AC Invest Two B.V.
(registration code 51490943) notified on 5 February about an agreement or other
arrangement that, if realized, would result in the acquisition or disposal of
shares or voting rights. According to the notification, the ownership and the
voting rights may increase so that the following thresholds will be reached or
crossed: 5%, 10%, 15%, 20% or 25%.
Ahlstrom Corporation (business identity code 1670043-1) notified on 10 January
2014 about an agreement or other arrangement that, if realized, would result in
the acquisition or disposal of shares or voting rights. According to the
notification the ownership and the voting rights may increase or decrease so
that the following thresholds will be reached or crossed: 5%, 10%, 15%, 20%,
25% or 30%.
Ahlström Capital Oy (business identity code 1670034-3) and AC Invest Two B.V.
(registration code 51490943) notified on 10 January 2014 about an agreement or
other arrangement that, if realized, would result in the acquisition or
disposal of shares or voting rights. According to the notification the
ownership and the voting rights may increase so that the following thresholds
will be reached or crossed: 5%, 10%, 15%, 20%, 25% or 30%.
CHANGES IN COMPANY MANAGEMENT IN 1 JANUARY - 31 DECEMBER 2014
Ms Lynda A. Kelly joined Suominen as Senior Vice President, Care business area
and a member of the Corporate Executive Team on 12 May 2014. Lynda A. Kelly has
a long and wide-ranging experience in nonwovens business, especially in
hygiene, medical and wiping products. Lynda A. Kelly, a US citizen, will report
to Ms Nina Kopola, President & CEO of Suominen Corporation.
Mr Dan Dunbar joined Suominen as Vice President, Sourcing and a member of the
Corporate Leadership Team on 14 July 2014. Dan Dunbar is an experienced
sourcing professional with a versatile background in globally operating
organizations. Dan Dunbar, a US citizen, will report to Ms Nina Kopola,
President & CEO of Suominen Corporation.
Mr Reima Kerttula, Senior Vice President, Flexibles, resigned from Suominen
Corporate Executive Team on 14 July, 2014 due to the divestment of Flexibles
business area.
EVENTS AFTER THE REVIEW PERIOD
Suominen announced on 30 January 2015 that it has started a planning process to
execute an investment in a new wetlaid production line, to be located in North
America, in order to implement its growth strategy. The planned investment
would be the most significant single initiative in Suominen's growth investment
program announced in December 2014.
According to Suominen's initial plans, the new nonwovens manufacturing line
would serve several higher value-adding end-use applications. Since the project
is still in the preparation phase, the company did not yet comment the total
value of the investment.
On 29 January 2015, Suominen received two notifications of major shareholding
under Securities Market Act Chapter 9 Section 5 from Mandatum Life Insurance
Company Limited (Mandatum). With a transaction executed on 23 January 2015
Mandatum has sold Suominen Corporation's shares based on which Mandatum's share
of Suominen Corporation's existing shares and votes has decreased to less than
5 %. After the transaction Mandatum owns 12,318,243 shares and votes in
Suominen Corporation (4.97 % of total shares and votes).
In addition, Mandatum notified that it has, on 5 February 2014, subscribed
convertible hybrid bond notes issued by Suominen Corporation, which entitles
Mandatum to subscribe maximum of 3,714,000 new shares in Suominen during the
converting period of 11 February 2014 to 10 February 2018. In case Mandatum
uses its subscription right, its ownership of total shares and votes in
Suominen Corporation exceeds again over the 5 % threshold and consequently
would result in crossing of the 5 % notification threshold. This arrangement
was not notified on the subscription date of the convertible hybrid bond
because at that time Mandatum owned more than 5 % of the shares in Suominen
Corporation and thus the arrangement would not have at that time led to
crossing of new notification thresholds.
BUSINESS RISKS AND UNCERTAINTIES
The estimate on the development of Suominen's net sales is in part based on
forecasts and delivery plans received from customers. Changes in these
forecasts and plans resulting from changes in the market conditions or in
customers' inventory levels may affect Suominen's net sales. Due to the
continued uncertainty in the general economic situation and the cautious
consumer purchasing habits, the forecasts include uncertainty.
Suominen's customer base is fairly concentrated, which adds to the
customer-specific risk. Long-term contracts are preferred in the case of the
largest customers. In practice the customer relationships are long-term and
last for several years.
The continued positive development of Suominen's business operations in the
United States increases the relevance of the exchange rate risk related to USD
in the Group's total exchange risk position. Suominen hedges this foreign
exchange position in accordance with its hedging policy.
Suominen purchases significant amounts of pulp- and oil-based raw materials
annually. Raw materials are the largest cost item for operations. Rapid changes
in the global market prices of raw materials affect the company's
profitability. Extended interruptions in the supply of Suominen's main raw
materials could disrupt production and have a negative impact on the Group's
overall business operations. As Suominen sources its raw materials from a
number of major international suppliers, significant interruptions are
unlikely.
Suominen has numerous regional, national and international competitors in its
different product groups. There is currently oversupply in several product
groups, particularly in Europe. If Suominen is not able to compete through an
attractive product offering, it may lose some of its market share, and the
competition may lead to increased pricing pressure on the company's products.
Due to the acquisition of the manufacturing plant in Brazil, the risks that are
characteristic to any developing region, including significant changes in
business environment or exchange rates, could have an impact on Suominen's
operations in Brazil.
The Group's damage risks are insured in order to guarantee the continuity of
operations. Suominen has valid damage and business interruption insurance
according to which it is estimated that the damages can be covered and the
financial losses caused by an interruption compensated.
The sensitivity of Suominen's goodwill to changes in business conditions is
described in the notes to the financial statements 2013. An equivalent
description will be available in the financial statements 2014, to be disclosed
in due course. Actual cash flows may deviate from the forecasted future
discounted cash flows, as the long economic lifetime of the company's
non-current assets, and changes in the estimated product prices, production
costs, and interest rates used in discounting may result in write-downs. The
fair value based on the value in use of assets or businesses in total or in
part does not necessarily correspond to the price that a third party would pay
for them.
General risks related to business operations are described in the Report of the
Board of Directors 2013. An equivalent description will be available in the
Report of the Board of Directors 2014, to be disclosed in due course.
BUSINESS ENVIRONMENT
Suominen's products are used in daily consumer goods, such as wet wipes,
hygiene product and medical nonwovens. The general economic situation
determines the development of consumer demand, even though the demand for
consumer goods is not very cyclical in nature. Europe and North America are the
main market regions for Suominen.
In light of the consumer confidence indices, the market environment both in
Europe and in North America continued to be divided. In the euro zone, consumer
confidence weakened further, whereas in the US, the slight drop in the index in
the third quarter proved temporary, as at the end of the year consumer
confidence reached its highest level since February 2008. As the outlook of the
general economic situation in Europe remains uncertain, challenges in
forecasting the development of the competitive environment of the European
nonwovens market continue.
Suominen assesses the trend in the demand for its products on the basis of both
the general market situation and, above all, on the basis of the framework
agreements drawn up with its customers. Suominen estimates that in 2015, the
demand for its products will continue to grow at the pace of 2014 on average.
OUTLOOK FOR 2015
Suominen expects that for the full year 2015, its net sales and operating
profit excluding non-recurring items will improve from year 2014. In 2014,
Suominen's net sales amounted to EUR 401.8 million and operating profit
excluding non-recurring items to EUR 26.9 million.
PROPOSAL ON DISTRIBUTION OF FUNDS
The distributable assets of the parent company at the end of 2014 totaled EUR
69,700,269.72, consisting of the loss for the financial year, EUR 9,618,929.34;
retained earnings of earlier financial periods, EUR -17,828,766.01; invested
non-restricted equity fund, EUR 97,191,611.31 and acquisitions costs of own
shares, EUR -43,619.21.
The Board of Directors proposes that funds shall be distributed from the
invested non-restricted equity fund in the amount of 0.01 euros per share.
Calculated on the basis of the current total amount of shares a total of
2,461,306.03 euros would be distributed. The date of record for the
distribution of the funds is 23 March 2015 and the funds shall be paid on 30
March 2015.
The Board of Directors proposes that no dividend shall be paid for the
financial year 2014.
The Board of Directors proposes that parent company's loss for the financial
period, - 9,618,929.34, and the losses from the previous financial periods, -
17,828,766.04 euros, shall be covered from the invested non-restricted equity
fund.
SUOMINEN GROUP CONSOLIDATED 1 JANUARY - 31 DECEMBER 2014
This financial statement release has been prepared according to the principles
defined in IAS 34 Interim Financial Reporting. Changes to published accounting
standards and interpretations, together with the new accounting standards that
came into force on 1 January 2014, are presented in the financial statements
for 2013.
All calculations in this financial statement release have been prepared in
compliance with the revised IAS 1 standard, ‘Presentation of Financial
Statements'. This standard is aimed at improving users' ability to analyze and
compare the information given in financial statements by separating changes in
equity of an entity arising from transactions with owners from other changes in
equity. Non-owner changes in equity will be presented in the statement of
comprehensive income.
The figures in this financial statement release are based on the audited
consolidated financial statements.
BALANCE SHEET EUR 1,000 31 Dec 2014 31 Dec 2013
------------------------------------------------------------------------------
Assets
Non-current assets
Goodwill 15,496 15,496
Intangible assets 12,510 12,025
Tangible assets 88,721 98,640
Loan receivables 8,202
Available-for-sale financial assets 1,124 939
Held-to-maturity investments 450 451
Other non-current receivables 2 614 511
Deferred tax assets 5,516 5,778
------------------------------------------------------------------------------
Non-current assets, total 134,633 133,838
Current assets
Inventories 32,380 31,908
Trade receivables 52,269 46,908
Loan receivables 600 131
Other current receivables 4,618 6,359
Income tax receivables 1,682 1,182
Cash at bank and in hand 38,430 18,585
------------------------------------------------------------------------------
Current assets, total 129,979 105,073
Assets, total 264,611 238,911
Shareholders' equity and liabilities
Equity attributable to owners of the parent company
Share capital 11,860 11,860
Share premium account 24,681 24,681
Invested non-restricted equity fund 97,192 97,123
Fair value and other reserves 52 -1,042
Translation differences 3,418 -3,022
Other shareholders' equity -46,890 -51,094
------------------------------------------------------------------------------
Shareholders' equity 90,313 78,506
Hybrid bond 18,424
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Shareholders' equity, total 108,737 78,506
Liabilities
Non-current liabilities
Deferred tax liabilities 8,789 7,183
Provisions 132
Debentures 75,000
Other non-current liabilities 1,729 1,125
Interest-bearing liabilities 6,667 70,399
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Non-current liabilities, total 92,185 78,839
Current liabilities
Interest-bearing liabilities 3,347 24,071
Income tax liabilities 246 144
Trade payables and other current liabilities 60,096 57,351
------------------------------------------------------------------------------
Current liabilities, total 63,689 81,567
Liabilities, total 155,874 160,405
Shareholders' equity and liabilities, total 264,611 238,911
STATEMENT OF INCOME
EUR 1,000 Q4/2014 Q4/2013 Q1-Q4/20 Q1-Q4/20
14 13
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 104,778 89,837 401,762 373,684
Cost of goods sold -92,582 -80,472 -352,091 -333,580
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gross profit 12,196 9,365 49,671 40,104
Other operating income 688 832 2,655 2,485
Sales and marketing expenses -1,693 -1,631 -6,278 -5,583
Research and development -815 -731 -2,877 -3,139
Administration expenses -3,816 -3,525 -14,144 -13,659
Other operating expenses -327 -136 -2,177 -810
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before non-recurring 6,233 4,174 26,851 19,398
items
Non-recurring items -94 -482 -954 -482
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 6,139 3,692 25,897 18,916
Financial income and expenses -997 -1,096 -8,075 -5,781
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit before income taxes 5,142 2,596 17,822 13,135
Income taxes -381 -1969 -7,645 -7,419
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period, continuing 4,761 627 10,177 5,716
operations
Discontinued operations -1,442 717 -3,518
Profit/loss for the period
Impairment loss recognized on the -118 -5,921 -18,314
remeasurement to fair value and cost to
sell
--------------------------------------------------------------------------------
Profit/loss for the period, discontinued -1,560 -5,204 -21,832
operations
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 4,761 -933 4,973 -16,119
Earnings/share, EUR 0.02 0.00 0.04 0.02
Continuing operations
Discontinued operations -0.01 -0.02 -0.09
Total 0.02 0.00 0.02 -0.07
Diluted, total 0.02 0.00 0.02 -0.07
STATEMENT OF COMPREHENSIVE INCOME
EUR 1,000 Q4/2014 Q4/2013 Q1-Q4/2014 Q1-Q4/2013
--------------------------------------------------------------------------------
-----------
Profit/loss for the period 4,761 -933 4,973 -16,119
Other comprehensive income:
Items that may be reclassified subsequently to
profit or loss:
Currency translation differences on 866 -1,072 6,863 -2,664
foreign operations
Fair value changes of cash flow hedges 186 -198 1,368 353
Items related to discontinuing 355 355
operations
Other reclassifications -22 463 3 325
-----------
-----------
Total 1,030 -452 8,234 -1,631
---------------------------------------------------------------------
Items that will not be reclassified
subsequently to profit or loss:
Actuarial gains and losses -150 -43 -150 18
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -150 -43 -150 18
Income tax on other comprehensive -89 13 -650 120
income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total other comprehensive income 791 -483 7,434 -1,493
Total comprehensive income for the 5,553 -1,415 12,407 -17,612
period
Total comprehensive income arises
from:
Continuing operations 5,553 145 17,611 4,220
Discontinued operations -1,560 -5,204 -21,832
--------------------------------------------------------------------------------
Total comprehensive income for the 5,553 -1,415 12,407 -17,612
period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
a. Share capital
b. Share premium account
c. Invested non-restricted equity fund
d. Own shares
e. Translation differences
f. Fair value reserves
g. Other shareholders' equity
h. Shareholders' equity
i. Hybrid bond
j. Shareholders' equity total
EUR a. b. c. d. e. f. g. h. i.
j.
1,000
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Total 11,860 24,681 97,123 -43 -3,022 -999 -51,094 78,506
78,506
equit
y at
1 Jan
2014
Profit 4,973 4,973
4,973
/loss
for
the
perio
d
Other 6,440 1,094 -100 7,435
7,435
compr
ehensi
ve
income
Share- 70 70
70
based
payme
nts
Convey 69 69
69
ance
of own
shares
Hybrid -739 -739 18,424
17,685
bond
--------------------------------------------------------------------------------
----
--------------------------------------------------------------------------------
----
Total 11,860 24,681 97,192 -43 3,418 95 -46,890 90,313 18,424
108,737
equit
y at
31 Dec
2014
EUR a. b. c. d. e. f. g. h. i.
j.
1,000
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Total 11,860 24,681 97,054 -43 -549 -1,209 -35,783 96,011
96,011
equit
y at
1 Jan
2013
Profit -16,119 -16,119
-16,119
/loss
for
the
period
Other -2,472 210 770 -1,493
-1,493
compr
ehensi
ve
income
Share- 38 38
38
based
payme
nts
Convey 69 69
69
ance
of own
share
s
--------------------------------------------------------------------------------
--
--------------------------------------------------------------------------------
--
Total 11,860 24,681 97,123 -43 -3,021 -999 -51,094 78,506
78,506
equit
y at
31 Dec
2013
CASH FLOW STATEMENT
EUR 1,000 Q1-Q4/2014 Q1-Q4/2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operations
Operating profit 25,897 18,916
Total adjustments 19,030 7,704
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow before change in working capital 44,927 26,620
Change in working capital 6,140 6,482
Financial items -6,514 -6,216
Taxes paid -7,434 -5,556
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from operations 37,119 21,330
Investment payments
Investments in tangible and intangible assets -7,740 -5,598
Business combinations -19,261
Proceeds from disposed business operations 4,736 3,441
Proceeds from disposal of fixed assets and other 59 785
proceeds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investing activities -22,206 -1,372
Financing
Non-current loans drawn 10,000
Repayments of non-current loans -78,220 -21,042
Repayments of capital loans -920
Hybrid bond 17,500
Debentures 75,000
Change in current loans -18,324 6,300
Cash flow from financing 5,956 -15,662
--------------------------------------------------------------------------------
Change in cash and cash equivalents 20,869 4,296
Cash and cash equivalents 18,585 14,301
Unrealized exchange rate differences -1,025 -13
Change in cash and cash equivalents 20,869 4,296
--------------------------------------------------------------------------------
Cash and cash equivalents 38,430 18,585
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow statement includes discontinued operations.
KEY FIGURES Q4/2014 Q4/2013 Q1-Q4/2014 Q1-Q4/2013
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Net sales, change, % * 16.6 6.2 7.5 4.7
Gross profit, % ** 11.6 10.4 12.4 10.7
Operating profit, % ** 5.9 4.1 6.4 5.1
Financial income and -1.0 -1.2 -2.0 -1.5
expenses, % **
Profit before income taxes, 4.9 2.9 4.4 3.5
% **
Profit for the period, %, 4.5 0.7 2.5 1.5
continuing operations
Profit for the period, %, -1.7 -1.3 -5.8
discontinued operations **
Profit for the period, % ** 4.5 -1.0 1.2 -4.3
Earnings/share, EUR, 0.02 0.00 0.04 0.02
continuing operations
Earnings/share, EUR, -0.01 -0.02 -0.09
discontinued operations
Earnings/share, EUR, Group 0.02 0.00 0.02 -0.07
Diluted earnings/share, 0.02 0.00 0.02 -0.07
EUR, total
Distribution of funds/share, EUR*** 0.01
Equity/share, EUR 0.44 0.32 0.44 0.32
Cash flow from 0.04 0.07 0.15 0.09
operations/share, EUR
Return on equity (ROE), % 5.1 -18.6 5.1 -18.6
Return on invested capital (ROI), 12.0 -0.7 12.0 -0.7
Return on invested capital 15.7 12.4 15.7 12.4
(ROI), %, continuing
operations
Equity ratio, % 41.2 32.9 41.2 32.9
Gearing, % 34.7 96.2 34.7 96.2
Gross investments, 2,625 2,994 7,066 4,413
EUR 1,000, continuing
operations
Depreciation, EUR 1,000, 4,142 3,447 15,576 13,892
continuing operations
Average personnel, 591 550
continuing operations
Non-current interest- 81,667 70,399 81,667 70,399
bearing liabilities
Current interest-bearing 3,347 24,071 3,347 24,071
liabilities
Interest-bearing receivables **** -47,232 -18,985 -47,232 -18,985
---------------------------------------------------------------------
---------------------------------------------------------------------
Interest-bearing net liabilities 37,782 75,485 37,782 75,485
*Compared with the same period last year.
** Share of net sales.
*** Proposal for the Annual General Meeting. The funds would be distributed
from the invested non-restricted equity fund.
**** Includes interest-bearing loan receivables of EUR 8.8 million granted to
the divested Flexibles business.
BUSINESS COMBINATIONS
Suominen acquired the Brazilian unit of the Ahlstrom Home and Personal
nonwovens business on 10 February 2014. The main parts of the Home and Personal
nonwovens business were acquired in 2011, but due to the delays for some
licenses and authorizations the acquisition of the Brazilian business was
prolonged. Thanks to the acquisition, Suominen's nonwovens business has a
better coverage on the South American markets.
The balance sheet and the income statement of the Brazilian company were
consolidated to Suominen as from 1 February 2014.
The shares of the local company were acquired. The enterprise value was EUR
17.5 million. The final consideration was EUR 19.6 million.
Consideration Fair
value
--------------------------------------------------------------------------------
Cash 19,558
Recognized amounts of identifiable assets acquired and liabilities Fair
assumed according to the initial calculations: values
1 000 e
--------------------------------------------------------------------------------
Property, plant and equipment 10,779
Intangible assets 20
Other non-current receivables 2,737
Inventories 3,195
Trade and other receivables 3,423
Cash 297
Total assets 20,452
--------------------------------------------------------------------------------
Financial liabilities 416
Other liabilities 478
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 894
The identifiable net assets 19,558
--------------------------------------------------------------------------------
The transaction costs of EUR 0.2 million are reported in the non-recurring
items.
The Group´s net sales would have been EUR 403.3 million and operating profit
EUR 26.3 million, if the transaction had been realized at the start of 2014 and
the costs in the end of 2013.
DISCONTINUED OPERATIONS
EUR 1,000 Q1-Q4/20 Q1-Q4/20
14 13
--------------------------------------------------------------------------------
Net sales 32,521 59,438
Costs -31,608 -62,601
--------------------------------------------------------------------------------
Profit before income taxes from discontinued operations 913 -3,163
Income taxes -197 -231
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit after income taxes from discontinued operations 716 -3,394
Impairment loss recognized on the remeasurement to fair -5,921
value and cost to sell
Profit/loss for the period from discontinued operations -5,205 -3,394
--------------------------------------------------------------------------------
The impact of the divestment of the Flexibles business on
the Group´s financial position
Tangible and intangible assets 17,942
Non-current receivables 1,511
Inventories 7,340
Trade receivables and other current receivables 9,004
Cash at bank and in hand 997
Total 36,794
-----------------------------------------------------------------------
Non-current liabilities 4,642
Trade payables and other current liabilities 10,157
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Total 14,799
Total net assets sold 21,995
Cash consideration 5,733
Cash equivalents held by discontinued operations -997
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Net cash flow 4,736
Cash flow from discontinued operations
Cash flow from operations 774
Cash flow from investing activities -376
Cash flow from financing -1,800
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Change in cash and cash equivalents -1,402
NET SALES BY MARKET AREA
EUR 1,000 Q1-Q4/2014 Q1-Q4/2013
-----------------------------------------------
-----------------------------------------------
Finland 2,516 2,292
Europe, other 139,738 138,020
North and South America 248,942 224,132
Other countries 10,565 9,240
-----------------------------------------------
-----------------------------------------------
Net sales, total 401,762 373,684
QUARTERLY FIGURES
EUR 1,000 Q1/2014 Q2/2014 Q3/2014 Q4/2014 Q1/2014
-
Q4/2014
--------------------------------------------------------------------------------
Net sales 98,353 95,340 103,291 104,778 401,762
Operating profit before 6,384 5,524 8,710 6,233 26,851
non-recurring items
% of net sales 6.5 5.8 8.4 5.9 6.7
Non-recurring items -233 -278 -349 -94 -954
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit, total 6,151 5,246 8,361 6,139 25,897
% of net sales 6.3 5.5 8.1 5.9 6.4
Net financial expenses -1,467 -1,276 -4,334 -997 -8,075
--------------------------------------------------------------------------------
Profit before income taxes 4,684 3,970 4,027 5,142 17,822
TAXES FOR THE PERIOD UNDER REVIEW
Income tax expense is calculated by country, on the basis of taxable results
and income tax rates.
INFORMATION ON RELATED PARTIES
Suominen has related party relationships with the members of the Board of
Directors, and the members of the Corporate Executive Team, and until 7 October
2014 with Ahlstrom Corporation, including its subsidiaries and associated
companies. The company has no associated companies. Salaries paid to the
related parties amounted to EUR 1,725 thousand, obligatory pension payments EUR
170 thousand, voluntary pension payments EUR 35 thousand and share-based
payments EUR 198 thousand.
Other related-party transactions
EUR 1,000 1-12/2014 1-12/2013
-----------------------------------------------------
-----------------------------------------------------
Sales of goods and services 5,083 16,439
Purchases of goods and services 58,487 62,342
Trade and other receivables 1,396
Trade and other payables 2,073
Other related-party transactions are transactions with Ahlstrom Corporation and
its subsidiaries and associated companies.
CHANGES IN BORROWINGS
EUR 1,000 Q1-Q4/2014 Q1-Q4/2013
------------------------------------------------------------------------------
-----------
Total borrowings on 1 January 94,471 111,518
Current loans from financial institutions on 1 January 24,071 20,571
Discontinued operations -502
Change in current loans from financial institutions -20,222 3,500
------------------------------------------------------------------------------
-----------
Current loans from financial institutions on 31 Dec 3,347 24,071
Non-current loans on 1 January 70,399 90,027
Discontinued operations -4,283
Change in non-current loans -59,449 -19,628
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-----------
Non-current loans on 31 Dec 6,667 70,399
Debentures on 1 January
Change in debentures 75,000
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Debentures on 31 Dec 75,000 0
Capital loans on 1 January 920
Change in capital loans -920
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-----------
Capital loans on 31 Dec 0 0
Total borrowings on 31 Dec 85,014 94,471
CHANGES IN FIXED ASSETS
Q1-Q4/20 Q1-Q4/2
14 013
EUR 1,000 Tangible Intangib Tangible Intangi
le ble
--------------------------------------------------------------------------------
------------------
Book value at the beginning of the period 98,640 12,025 118,019 12,529
Investments 4,650 2,416 3,662 1,004
Decreases -9 -18
Discontinued operations -18,211 -160 -5,365 -115
Business combinations 10,779 20
Depreciation -13,714 -1,862 -15,000 -1,545
Translation differences and other changes 6,586 71 -2,658 152
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Book value at the end of the period 88,721 12,510 98,640 12,025
CONTINGENT LIABILITIES
EUR 1,000 Q1-Q4/2014 Q1-Q4/2013
-----------------------------------------------------------------
-----------
For own debt
Loans from financial institutions 10,000 91,345
Bonds 75,000
-----------------------------------------------------------------
-----------------------------------------------------------------
Total 85,000 91,345
Guarantee commitments
Absolute guarantees 85,000
Guarantees on other own commitments 1,800
Guarantees on behalf of third parties 4,017
Nominal values of pledges
Real estate mortgages 27,042
Floating charges 165,761
Pledged subsidiary shares and loans 189,699
Other own commitments
Operating leases, real estates 21,822 22,672
Operating leases, machinery and equipment 1,089 2,373
FINANCIAL ASSETS BY CATEGORY
a. Financial assets at fair value through profit or loss
b. Held-to-maturity investments
c. Loans and receivables
d. Available-for-sale financial assets
e. Derivatives held for hedge accounting
f. Book value
g. Fair value
Classes by instruments' nature
EUR 1,000 a. b. c. d. e. f. g.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Available-for-sale financial 1,124 1,124 1,124
assets
Held-to-maturity investments 450 450 450
Other non-current receivables 980 1,634 2,614 2,614
Loan receivables 8,802 8,802 8,802
Trade receivables 52,269 52,269 52,269
Other current receivables 1,011 12 1,023 1,023
Cash and cash equivalents 38,430 38,430 38,430
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total at 31 Dec 2014 980 450 102,146 1,124 12 104,712 104,712
Classes by instruments' nature
EUR 1,000 a. b. c. d. e. f. g.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Available-for-sale financial assets 939 939 939
Held-to-maturity investments 451 451 451
Other non-current receivables 511 511 511
Loan receivables 131 131 131
Trade receivables 46,908 46,908 46,908
Other current receivables 58 371 429 429
Cash and cash equivalents 18,585 18,585 18,585
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total at 31 Dec 2013 569 451 65,996 939 0 67,954 67,954
Principles in estimating fair value for financial assets for 2014 are the same
as those used for preparing the financial statements for 2013.
FINANCIAL LIABILITIES
31 Dec 2014 31 Dec 2013
EUR 1,000 Book Fair Book Fair
value value value value
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Non-current
Loans from financial institutions 6,667 6,667 69,828 69,144
Pension loans 571 577
Debentures 75,000 75,150
Other non-current liablities 350 350
Total 82,017 82,167 70,399 69,721
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Current *)
Repayment of non-current liabilities
Loans from financial institutions 3,333 3,333 23,500 23,412
Pension loans 571 594
Financial leasing 14 14 86 86
Derivatives not held for hedge accounting 121 121 94 94
Derivatives held for hedge accounting 197 197 1,354 1,354
Other current liabilities 726 726
Trade payables 47,403 47,403 45,016 45,016
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Total 51,794 51,794 70,535 70,556
Total 133,811 133,961 140,934 140,277
*) In the balance sheet under current liabilities.
Principles in estimating fair value for financial liabilities for 2014 are the
same as those used for preparing the financial statements for 2013.
FAIR VALUE MEASUREMENT HIERARCHY
EUR 1,000 Level 1 Level 2 Level 3
-------------------------------------------------------------
-------------------------------------------------------------
Assets measured at fair value
Other non-current receivables 980
Assets held for sale 1,124
-------------------------------------------------------------
-------------------------------------------------------------
Total 2,104
Derivatives measured at fair value
Currency forward deals -236
Electricity derivatives -71
-------------------------------------------------------------
-------------------------------------------------------------
Total -307
Interest rate swaps were reversed at the refinancing arrangements.
Principles in estimating fair value for financial assets and their hierarchies
for 2014 are the same as those used for preparing the financial statements for
2013.
ANALYST AND PRESS CONFERENCE
Nina Kopola, President & CEO, and Tapio Engström, CFO, will present Suominen's
financial result 2014 in Finnish at an analyst and press conference in Helsinki
today, on Friday 30 January 2015 at 2pm - 3 pm (EET). The conference will take
place at Event House Bank, Unioninkatu 20, Helsinki. The presentation material
will be available after the event at www.suominen.fi.
NEXT INTERIM REPORT
Suominen Corporation will publish its Interim report for January-March 2015 on
Monday, 27 April 2015 approximately at 8:30 a.m.
Helsinki, 30 January 2015
SUOMINEN CORPORATION
Board of Directors
For additional information, please contact:
Nina Kopola, President & CEO, tel. +358 (0)10 214 300
Tapio Engström, Senior Vice President and CFO, tel. +358 (0)10 214 300
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.suominen.fi
Suominen in brief
Suominen manufactures nonwovens as roll goods for wipes as well as for medical
and hygiene products. The end products made of Suominen's nonwovens - wet
wipes, feminine care products and swabs, for instance - bring added value to
the daily life of consumers worldwide. Suominen is the global market leader in
nonwovens for wipes and employs approximately 600 people in Europe and in the
Americas. Suominen's net sales in 2014 amounted to MEUR 401.8 and operating
profit excluding non-recurring items to MEUR 26.9 (continuing operations). The
Suominen share (SUY1V) is listed in NASDAQ OMX Helsinki Stock Exchange. Read
more at www.suominen.fi.
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