Suominen Corporation
Financial result 2012
Helsinki February 15, 2013
Nina Kopola, President and CEO
Tapio Engström, CFO
Suominen Corporation 1 Feb 15, 2013
Contents
• Year 2012 and Q4 2012 at a glance
• Financial review Q4 and full year 2012
• Strategy: Suominen In The Lead
• Summary
Feb 15, 2013 Suominen Corporation 2
Year 2012 and Q4 at a glance
• Full year net sales EUR 454.9 million, operating profit excluding non-recurring
items EUR 13.7 million, operating profit EUR 0.9 million.
• Q4 net sales EUR 109.0 million, operating profit excluding non-recurring
items EUR 1.9 million, operating profit EUR -8.2 million.
• Suominen achieved structural cost savings totaling approximately EUR 10
million through Summit program.
• Wiping:
˗ rationalization of nonwovens production at Nakkila plant
˗ impairment losses of EUR 7.3 million recognized.
• Flexibles:
˗ temporary layoffs at Tampere unit
˗ a business recovery program launched at the end of the year.
Feb 15, 2013 Suominen Corporation 3
Global nonwovens market by segment about 15 billion euros
Global market leader in nonwovens for wipes
Suominen Corporation 4
Suominen Nr 1
total market about
1.5 billion euros
Source: Management estimates.
Feb 15, 2013
Financial review :
Q4 and full year 2012
Suominen Corporation Feb 15, 2013 5
Net sales for Q4 did not quite reach the level of previous quarters
44 43 43
85
111 113
122
109
0
20
40
60
80
100
120
140
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12
Net sales, million euros
• Net sales in 2012 was EUR 454.9
million (EUR 213.4 million in
2011)
• Comparable sales value declined
5% from 2011 pro forma figures
• Demand continued stronger in
the US market than in Europe.
• Prices were under pressure in
Europe.
• All production lines in Milan on
stream from May onwards
Suominen Corporation 6
Business acquired from Ahlstrom is
included in the figures as of Nov 1, 2011.
Pro forma net sales of the operations was
479 MEUR in 2011. 1-12/2012: M€ 454.9
Feb 15, 2013
Full year operating profit excl. non-recurring items improved significantly
-0.4
0.3
-1.4
0.3
2.7 2.4
6.7
1.9
-6
-4
-2
0
2
4
6
8
-2
-1
0
1
2
3
4
5
6
7
8
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12
Operating profit excl. non-recurring items, M€ and %
• 2012 operating profit excl. non-
recurring items was EUR 13.7
million (-1.1)
• 2012 operating profit EUR 0.9
million (-4.8) includes non-
recurring items of EUR 12.8
million in net value
• Strong contribution from the
acquired business.
• Summit program streamlined the
cost structure as planned.
• US demand showed a move
towards a more attractive product
mix.
Suominen Corporation 7
Million euros %
1-12/2012: Excl. non-recurring
items M€ 13.7
Feb 15, 2013
Cash flow from operations was strong in Q4
0.4
2.4
-1.1 -4.7
-6.4
11.9
7.8
11.7
-10
-5
0
5
10
15
Q1/11 Q2/11 Q3/11 Q4/11 Q2/12 Q3/12 Q4/12
Cash flow from operations
• 2012 cash flow from operations
was EUR 24.9 million (-2.9)
• EUR 5.0 million of working capital
has been released in 2012
Suominen Corporation 8
Q1/12
1-12/2012: M€ 24.9
Feb 15, 2013
Financial position steady
186.1 192.9
233.0
111.0 112.4 109.8 99.4 100.7
0
50
100
150
200
250
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12
Gearing, %
25.6 24.8 22.9
32.2 32.8 31.5
35.8 34.5
0
5
10
15
20
25
30
35
40
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12
Equity ratio, %
Suominen Corporation 9 Feb 15, 2013
• Financing package with banks was updated in October 2012.
• Leverage was 2.9
Wiping: Stronger segment on a totally new performance level
27.2 25.9 26.4
69.9
97.5 100.5
109.4
95.9
0
20
40
60
80
100
120
Net sales
Million euros
-0.3
0.06
-1.7
-0.3
3.8 3.9
8.1
3.0
-8
-4
0
4
8
12
16
-4
-2
0
2
4
6
8
10
Operating profit, M€ and %, excl. non-recurring items
Suominen Corporation 10
1-12/2012: M€ 403.2 1-12/2012: M€ 18.8
Million euros
%
Feb 15, 2013
Nonwovens sales
47%
19%
10%
18%
6% Baby wipes
Household wipes
Industrial wipes
Personal care
Other
• Share of baby wipes slightly down,
personal care and household wipes
grew.
• Demand continued to be stronger in
the US
• Margins under pressure in Europe due
to intensive competition.
• Synergies and cost savings are being
captured from the Summit program.
• Reshaping European production
platform: all lines in Italy are working
and production in Finland streamlined.
Suominen Corporation 11
Q1-Q4/2012: M€ 357.9 (99.2)
Feb 15, 2013
Codi Wipes portfolio moving towards personal care
40%
10%
50%
Baby
Moist toilet issue
Personal care
Q1-Q4/2012: M€ 49.4 (55.6) • Net sales down from previous
year by 11%.
• Consumer demand more price
conscious, meaning that retail
chains gain market share
especially in commodity type of
baby wipes
• Sales of personal care wipes
developed relatively better.
• Savings in operating costs helped
to compensate losses in volume
Suominen Corporation 12 Feb 15, 2013
Flexibles on red figures
16.6 17.0 16.2
15.1 13.9
12.8 12.7 13.4
0
2
4
6
8
10
12
14
16
18
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12
Net sales, M€
-0.06
0.5
0.3
-0.07
-0.6
-0.8 -0.6
-0.8 -8
-6
-4
-2
0
2
4
6
-0,8
-0,6
-0,4
-0,2
0
0,2
0,4
0,6
Q1/11 Q2/11 Q3/11 Q4/11
Operating profit, M€ and %, excl. non-recurring items
Q1/12 Q2/12 Q3/12
Suominen Corporation 13
1-12/2012: M€ 52.7 1-12/2012: M€ -2.8
million euros
%
Feb 15, 2013
0.4
0.2
0
-0.2
-0.4
-0.6
-0.8
Q4/12
Flexibles heading for a turnaround
46%
22%
23%
9% Food
Hygiene
Retail
Security and System
• Net sales down by 19 % from 2011, the
only segment showing growth was S&S
• Impact of lost sales end of 2011 was still
visible in the figures. New sales acquired
accumulate to increased sales slowly.
• Slow demand leads to more price driven
market. Temporary lay-offs started as a
counter-measure.
• Raw material prices in Q3 turned up
again following the general trends in
commodities and oil.
• Operating costs were down from
previous year thanks to the restructuring
of manufacturing platform in 2011.
Suominen Corporation 14
Q1-Q4/2012: M€ 52.7 (64.8)
Feb 15, 2013
Outlook for 2013
• The company estimates that its net sales for the full year 2013 will remain at
the level of 2012
• Operating profit excluding non-recurring items is expected to improve from
year 2012.
• In 2012, Suominen’s net sales were EUR 454.9 million and operating profit
excluding non-recurring items EUR 13.7 million.
Suominen Corporation 15 Feb 15, 2013
Strategy:
Suominen In the Lead
Suominen Corporation Feb 15, 2013 16
The three cornerstones of our strategy
The Suominen
Way
Step Change in
Profitability In The Lead
17
How we work How we operate How we win
Suominen Corporation Feb 15, 2013
The Suominen Way Step Change in
Profitability In The Lead
• Suominen Summit program
˗ Target of the program even exceeded, savings totaling approximately EUR 10 million
• Streamlining of operations
˗ Rationalization of nonwovens production and closing down of the in-house production
of polypropylene staple fibers at the Nakkila plant
• Demand-driven production
˗ Temporary layoffs at Tampere unit
• Continuous improvement of efficiency and productivity
Strategy implementation well under way
Feb 15, 2013 Suominen Corporation 18
The Suominen Way
Step Change in Profitability
In The Lead
Creation of New Suominen is a vital part of the strategy
• Creating common management systems
˗ Incentive system renewed during 2012, effective as of the beginning
of 2013.
• Ensuring common ways of working
˗ Integration of the business acquired from Ahlstrom
beginning of the common corporate culture
• Strengthening the common corporate culture
˗ Empowerment, accountability, passion
Feb 15, 2013 Suominen Corporation 19
The Suominen Way Step Change in
Profitability In The Lead
• We aim to accelerate our customers’ business.
• We have initiated measures to increase the share of products with
greater added value.
• We have introduced new, common tools and ways of operating to
boost the efficiency of the product development process and project
activities.
• We aim to increase our end-customer understanding.
Sharpening the new strategic direction
Feb 15, 2013 Suominen Corporation 20
Understanding the end user is crucial
Fiber
producer
Non-woven
producer
Brand owner
Converter
Retailer
Suominen Corporation Feb 15, 2013 21
Increasing the share of products with greater added value
Today In the future
Value for Money
Products with
higher added value
Feb 15, 2013 Suominen Corporation 22
Financial targets
Suominen aims to :
• Clearly improve its relative profitability. The target level of the company’s
return on investment (ROI) is to be above 10% (0.4 % in 2012).
• Have a solid capital structure with a gearing ratio principally between 40%
and 80% (100.7% in 2012).
• Increase its net sales at a rate that exceeds the average growth rate of the
industry.
Feb 15, 2013 Suominen Corporation 23
Global market leader in nonwovens for wipes
Cost savings achieved €
1
Strategy In The Lead
In The Lead
2012 result showing the right trend
24
Summary
Suominen Corporation Feb 15, 2013
Thank you!
Suominen Corporation Feb 15, 2013 25
Appendix: Major shareholders
Feb 15, 2013 Suominen Corporation 26
Major shareholders on Jan 31, 2013
Shareholder Number of shares % of shares and votes
1. Ahlstrom Corporation 66 666 666 27,1
2. Ilmarinen Mutual Pension Insurance Company 26 422 103 10,7
3. Varma Mutual Pension Insurance Company 22 500 000 9,2
4. Mandatum Life Finnish Industry Investment Ltd 22 222 222 9,0
5. Finnish Industry Investment Ltd 22 222 222 9,0
6. Tapiola Pension 14 123 255 5,7
7. Oy Etra Invest Ab 12 223 320 5,0
8. Nissi Evald and Hilda Foundation 6 943 646 2,8
9. Heikki Bergholm 5 141 710 2,1
10. Sitra 4 444 444 1,8
11. Mikko Maijala 3 337 337 1,4
12. Juhani Maijala 3 286 743 1,3
13. Onninen-Sijoitus Oy 2 500 000 1,0
14. Yleisradio Pension Fund 2 222 222 0,9
15. Finnish Cultural Foundation 2 222 221 0,9
16. Pharmacy Pension Fund 2 014 077 0,8
17. Eeva Maijala 1 578 635 0,6
18. AC Invest Two B.V. 1 355 555 0,6
19. Harald Relander 1 280 000 0,5
20. Oy Chemec Ab 1 111 112 0,5
Nominee registered 339 233 0,1
Feb 15, 2013 Suominen Corporation 27