results q4 and fy2015

Suominen Corporation

Q4 and FY2015

Nina Kopola, President & CEO

Tapio Engström, CFO

29 January 2016

Our purpose is to make nonwovens continuously better for people.

Agenda

• Highlights Q4 and FY2015

• Strategy and strategy execution

• Financial review Q4 and FY2015

• Proposal on distribution of dividend

• Outlook 2016

• Reverse share split

• Q&A

2016/1/29 2


2015: Cash flow remained strong, development of net

sales below target

2016/1/29 3

31.2 M€ 7.0%444 M€

0.02 €27.3 M€ Q4


Net sales grew 10.5% in FY2015, Q4 on the level of the

comparison period

2016/1/29 4

Net sales, M€ Net sales, M€

89,8

98,4 95,3103,3104,8

111,9112,9114,9

104,2

0

20

40

60

80

100

120

140

356,9373,7

401,8

444,0

0

100

200

300

400

500

2012 2013 2014 2015

- In Q4, net sales was attributable to postponing of orders by some customers until after the turn of

the year.

- In FY2015, net sales grew 10.5% due to the strengthening of the USD compared to EUR.

Suominen’s net sales grew organically and excluding the effect of exchange rates by roughly 1%.

Continuing operations Continuing operations


Balancing the portfolio continues

2016/1/29 5

41%

21%

17%

11%

8%

2014: 401.8 M€

40%

22%

17%

11%

7%

2015: 444.0 M€

Typically products with higher added value

Baby wipes Personal care Household Workplace Medical & hygiene

47%

18%

19%

10%

6%

2012: 357.9 M€


Operating profit for FY2015 grew by 16%, Q4 below

expectations

2016/1/29 6

6,5 % 5,8 %

5.0 %

5,9 %

6,5 %

8,8 % 8,5 %

4,1 %

0%

2%

4%

6%

8%

10%

0

2

4

6

8

10

M€ %

Operating profit excl. NRI, M€ and % Operating profit excl. NRI, M€ and %

- Operating profit in Q4 was weakened by the expenses related to development projects

in progress, among other things.

- The strengthening of the US dollar compared to EUR increased the operating profit.

Continuing operations

4,2 %

5,2 %

6,7 %

7,0 %

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

5

10

15

20

25

30

35

2012 2013 2014 2015

M€ %

Continuing operations

NRI=Non-recurring items.


Strategy2015–2017

72016/1/29


Suominen’s strategy 2015–2017

• Deliver superior value in thoughtfully selected market applications.

• Drive proactive key account management for mutual value creation.

• Execute demand driven supply chain.

• Evolve culture and capabilities to build strong product company.

Market Driven Product Leader


• Organic net sales growth at a rate that exceeds

the industry average (approx. 3%)

• A return on investment of more than 12%

• A gearing ratio between 40% and 80%

Purpose – why?

Vision – where?

Strategy – how?

Financial targets

82016/1/29


Growth investment program progressed on

three continents

Bethune, SC, US

Paulínia, Brazil

Alicante,

Spain

Nakkila, Finland

92016/1/29


Progress of the ~60 M€ growth investment program

10

2015 2016 2017

“Retrofit”

Paulínia,

Alicante

Q4/2015

“Expand”

Nakkila

Q1/2015

Bethune

H2/2016

Projected growth investments

approx. 60 M€ until 2017

To be

confirmed

~54 M€ spending ~6 M€

2016/1/29


Product Development function was enhanced

determinedly

11

Enhancing capabilities

• Innovation process,

“Suominen Innovation

Machine”

- Front End Innovation

- Creating a prioritized

project portfolio

- Introduction of formal

gate process for running

projects

Enhancing capacity

• Creating critical mass

- R&D expenditure to

increase to above 1% of

net sales (0.8% in 2015)

- Four new people

employed in 2015, two of

them PhDs

- Centralizing resources

2016/1/29

Our purpose is to make nonwovens continuously better for people. 12

Suominen launched six new products

Five for Care, one for Convenience business

2016/1/29


FIBRELLA® Lite awarded by Research, Innovation &

Science for Engineered Fabrics (RISE) Conference

29.1.2016 13


101,0 96,2

34,7

25,9

0

20

40

60

80

100

120

2012 2013 2014 2015

Gearing, %

6,9 %

3,5 %

0,8 %

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015

n/a

Organic net sales growth, %

Progress on mid-term financial targets

2016/1/29 14

5,0 %

12,4 %

15,7 % 15,9 %

0%

5%

10%

15%

20%

2012 2013 2014 2015

ROI, %

• Organic net sales growth, excluding

the effect of exchange rates,

compared with previous year.

• Target level marked with dashed line.

• Figures are for continuing

operations.


Financial review Q4 and FY20152016/1/29 15


Profit for the period grew by 67% despite the low

level of Q4

Profit for the period, M€ Profit for the period, M€

2,62,2

0,6

4,8

3,5

6,2

5,4

1,9

0

1

2

3

4

5

6

7

-2,8

5,7

10,2

17,0

-5

0

5

10

15

20

Continuing operations Continuing operations

16

2012 2013 2014 2015

2016/1/29


Statement of profit or loss

2016/1/29 17

EUR thousands Q4/2015 Q4/2014 2015 2014

Net sales 104,244 104,778 444,042 401,762

Cost of goods sold -92,972 -92,582 -386,042 -352,091

Gross profit 11,272 12,196 58,000 49,671

Other operating income 3 689 2,637 2,655

Sales and marketing expenses -2,410 -1,692 -7,760 -6,278

Research and development -925 -815 -3,527 -2,877

Administration expenses -3,963 -4,011 -16,709 -15,418

Other operating expenses 284 -228 -862 -1,857

Operating profit 4,262 6,139 31,778 25,897

Net financial expenses -1,358 -998 -5,302 -8,075

Profit before income taxes 2,903 5,141 26,476 17,822

Income taxes -984 -381 -9,456 -7,645

Profit for the period from

continuing operations 1,919 4,761 17,020 10,177

Gross profit improved

from previous year

Healthy cost structure

also in 2015

Effective tax rate

35.7%


Statement of financial position, assets

2016/1/29 18

EUR thousands 31 Dec 2015 31 Dec 2014

Non-current assets

Goodwill 15,496 15,496

Intangible assets 13,275 12,510

Property, plant and equipment 97,931 88,721

Loan receivables 7,793 8,202

Available-for-sale assets 777 1124

Held-to-maturity investments − 450

Other non-current receivables 2,402 2614

Deferred tax assets 4,491 5,516

Total non-current assets 142,165 134,633

Current assets

Inventories 32,557 32,380

Trade receivables 51,547 52,269

Loan receivables 1,000 600

Other current receivables 7,038 4,618

Assets for current tax 1,874 1,682

Cash and cash equivalents 55,570 38,430

Total current assets 149,585 129,979

Total assets 291,750 264,611

Investment program

visible in assets

Strong cash enables the

execution of the

investment program


Statement of financial position, equity and liabilities

2016/1/29 19

EUR thousands 31 Dec 2015 31 Dec 2014

Share capital 11,860 11,860

Share premium account 24,681 24,681

Reserve for invested unrestricted equity 69,652 97,192

Treasury shares -44 -44

Fair value and other reserves -118 96

Exchange differences 5,097 3,419

Other equity -3,076 -46,890

Total equity attributable to owners of the parent 108,052 90,313

Hybrid bond 17,664 18,424

Total equity 125,716 108,737

Liabilities

Non-current liabilities

Deferred tax liabilities 10,890 8,789

Liabilities from defined benefit plans 1,105 1,151

Other non-current liabilities 651 578

Debentures 75,000 75,000

Other non-current interest-bearing liabilities 18,498 6,667

Total non-current liabilities 106,144 92,185

Current liabilities

Current interest-bearing liabilities 3,363 3,347

Liabilities for current tax 47 246

Trade payables and other current liabilities 56,479 60,096

Total current liabilities 59,889 63,689

Total liabilities 166,034 155,874

Total equity and liabilities 291,750 264,611

Loan withdrawal to

secure the financing

of the investment

program


Cash flow strong as expected in FY2015, also in Q4

Cash flow from operations, M€ Cash flow from operations, M€

24,9

21,3

37,1

27,3

0

5

10

15

20

25

30

35

40

2012 2013 2014 2015

2016/1/29 20

- In FY2015, cash flow accumulation between quarters was more even than

before.

-0,4

11,3

16,9

9,3

4,5 3,9

7,9

11,0

-2

0

2

4

6

8

10

12

14

16

18


Statement of cash flows (1/2)

21

Cash flow in 2014 includes also discontinued operations.

2016/1/29

EUR thousands 1-12/2015 1-12/2014

Cash flow from operations

Profit / loss for the period 17,020 4,973

Total adjustments to profit / loss for the period 32,870 39,953

Cash flow before changes in net working capital 49,890 44,927

Change in net working capital -7,921 6,140

Financial items -6,425 -6,514

Income taxes -8,269 -7,434

Cash flow from operations 27,274 37,119

Cash flow from investments

Investments in property, plant and equipment and

intangible assets-22,369 -7,740

Investments in acquired businesses − -19,261

Cash flow from disposed businesses 167 4,736

Sales proceeds from property, plant and equipment and

intangible assets10 59

Cash flow from investments -22,192 -22,206

Change in working

capital burdened

cash flow from

operations

Growth investments

getting visible

Our purpose is to make nonwovens continuously better for people. 22

Statement of cash flows (2/2)

Cash flow in 2014 includes also discontinued operations.

2016/1/29

EUR thousands 1-12/2015 1-12/2014

Cash flow from financing

Drawdown of hybrid bond − 17,500

Drawdown of debenture bond − 75,000

Drawdown of other non-current interest-bearing liabilities 15,000 10,000

Repayment of other non-current interest-bearing

liabilities-3,333 -78,220

Changes in current interest-bearing liabilities -14 -18,324

Changes in loan receivables 600 −

Share issue 340 −

Distribution of funds -2,504 −

Cash flow from financing 10,089 5,956

Change in cash and cash equivalents 15,171 20,869

Cash and cash equivalents at the beginning of the period 38,430 18,585

Effect of changes in exchange rates 1,968 -1,025

Change in cash and cash equivalents 15,171 20,869

Cash and cash equivalents at the end of the period 55,570 38,430


Proposal on distribution of dividend

23

• The Board of Directors

proposes to the Annual General

Meeting EUR 0.02 per share

dividend from 2015.

• On 29 Jan 2016 the company

had 251,511,730 issued shares,

excluding treasury shares. With

this number of shares, the total

amount of dividends to be

distributed would be EUR

5,030,234.60.

• The proposal is in line with the

dividend policy.

-2,8

5,7

10,2

17,0

-5

0

5

10

15

20

2012 2013 2014 2015

Profit for the period, M€

-0,01

0,02

0,04

0,06

0,01

0,02

-0,02

0

0,02

0,04

0,06

0,08

2012 2013 2014 2015

EPS DPS

EPS and DPS*, €

2016/1/29

*In 2015, proposal for the AGM. In 2014, distribution of funds.


Outlook for 2016

• Suominen expects that for the full year 2016, its net sales

and operating profit excluding non-recurring items will

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.

242016/1/29


Reverse share split

• Suominen plans to carry out a reverse share split with a 5:1

ratio.

• The target for the reverse split is to make the share more

attractive to investors, to enhance share trading conditions

and to add flexibility to the decision making regarding

potential future payments of dividend.

• The arrangement is subject to the resolution of the Annual

General Meeting.

• The plan is to combine the shares on 21 March 2016 after the

close of trading in Nasdaq Helsinki.

2016/1/29 25


Summary 2015

31.2 M€ 7.0%444 M€

0.02 €27.3 M€

26

Q4

2016/1/29

Thank you!

29.1.2016 27

results q4 and fy2015

Investor Relations