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Suominen Corporation’s Half-Year Financial Report for January 1 – June 30, 2021: Solid profitability in Q2, short-term demand outlook challenging

 

Suominen Corporation’s Half-Year Financial Report on August 13, 2021 at 9:30 a.m. (EEST)

Suominen Corporation’s Half-Year Financial Report for January 1 – June 30, 2021:
Solid profitability in Q2, short-term demand outlook challenging

 

KEY FIGURES

  4-6/2021 4-6/2020 1-6/2021 1-6/2020 1-12/2020
Net sales, EUR million 113.6 122.2 229.0 232.4 458.9
Comparable EBITDA 15.3 18.0 33.8 29.3 60.9
Comparable EBITDA, % 13.4 14.7 14.8 12.6 13.3
EBITDA 15.3 18.0 33.8 29.3 60.9
Operating profit, EUR million 10.3 12.4 23.9 18.1 39.5
Operating profit, % 9.1 10.1 10.4 7.8 8.6
Profit for the period, EUR million 6.1 8.4 19.9 11.9 30.1
Cash flow from operations, EUR million 1.2 9.6 17.1 19.0 57.0
Cash flow from operations per share, EUR 0.02 0.17 0.30 0.33 0.99
Earnings per share, basic, EUR 0.11 0.15 0.35 0.21 0.52
Return on invested capital, rolling 12 months, % 17.9 8.9 16.7
Gearing, % 22.4 40.9 25.4

In this financial report, figures shown in brackets refer to the comparison period last year if not otherwise stated.

April–June 2021 in brief:

- Net sales decreased by 7.0% and amounted to EUR 113.6 million (122.2)
- Comparable EBITDA decreased by 15.1% and amounted to EUR 15.3 million (18.0)
- Cash flow from operations was EUR 1.2 million (9.6)

January–June 2021 in brief:
- Net sales decreased by 1.5% and amounted to EUR 229.0 million (232.4)
- Comparable EBITDA increased by 15.5% and amounted to EUR 33.8 million (29.3)
- Cash flow from operations was EUR 17.1 million (19.0)

Outlook for 2021

As announced on August 12, 2021Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 will decrease from 2020 due to the slowdown in the demand for nonwovens in the second half of 2021 as well as some continuing volatility in the raw material and transportation markets. In 2020, Suominen’s comparable EBITDA was EUR 60.9 million.

Petri Helsky, President & CEO:

“In the second quarter our net sales decreased by 7.0% from the comparison period to EUR 113.6 million (122.2). Sales volumes decreased from the very high level of Q2/2020, but sales prices increased following higher raw material prices. Our comparable EBITDA (earnings before interest, taxes, depreciation and amortization) was on a good level and reached EUR 15.3 million (18.0). The result was impacted negatively by the higher raw material and logistics costs as expected as well as by the lower sales and production volumes. These were partially compensated by the higher sales prices and improved raw material efficiency.

Going forward Suominen is in a strong position both strategically and financially. The global market expectation is that in the long run the end user demand for wipes will remain above pre-COVID levels. In Europe we see that the EU Single-Use Plastics Directive (SUPD) will benefit Suominen as we are well placed to respond to the growing demand for innovative and sustainable nonwovens with our pioneering fiber-based nonwovens know-how and spunlace technology. We are the leader in sustainable nonwovens and our target is to increase the share of sustainable products by 50% by 2025 compared to 2019 and to have at least ten sustainable product launches per year. By the end of June, we have launched nine sustainable products this year.

However, towards the end of the second quarter, especially our North American customers started to experience a sudden deceleration of demand, which in combination with extraordinary stockpiling throughout the entire supply chain has created an imbalance of inventories. This has impacted also Suominen’s orders, although in several cases we have been able to benefit from our position as the preferred supplier of our customers. We expect that the demand for our products will recover once this temporary imbalance is cleared. Our current view is that the recovery will start in the fourth quarter.

In Europe, another specific factor impacting demand has been the earlier uncertainty regarding the final formulation of the SUPD that postponed our customers’ development projects and now that the formulation is clear, our orders have been affected as converters and retailers seek to sell out their existing stocks.

The investment project to upgrade and restart one of our existing production lines in Cressa, Italy neared completion during the quarter and will be finalized during the third quarter, slightly ahead of the original plan. This investment strengthens our capabilities in Europe and is made in line with our strategy aiming for growth. The two other ongoing investment projects, one in Italy and another in the US, are proceeding as planned and will be finalized during the second half of the year.

In June Suominen issued a senior unsecured 6-year bond of EUR 50 million with a coupon rate of 1.50 percent. The net proceeds from the bond offering will be used for general corporate purposes.

In the first half of the year we were able to improve our financial performance versus H1/2020. In the second half the main uncertainty is related to the customer demand, and we also continue to experience some volatility in the raw material and logistics markets. It is now clear that at least the third quarter will be very difficult in terms of sales volumes. Our current expectation is that the demand will start to recover towards the end of the year as the imbalance in the supply chain is being resolved. We are naturally taking all possible measures to mitigate the impacts from this temporary slowdown in demand.”

NET SALES

AprilJune 2021
In April–June 2021, Suominen’s net sales decreased by 7.0% from the comparison period to EUR 113.6 million (122.2). Sales volumes decreased from the very high level of Q2/2020, but sales prices increased following higher raw material prices. The impact of currencies on net sales was EUR -6.5 million.

Suominen’s business areas are Americas and Europe. The net sales of the Americas business area were EUR 67.4 million (77.2) and of the Europe business area EUR 46.3 million (45.0).

JanuaryJune 2021

In January–June 2021, Suominen’s net sales decreased by 1.5% from the comparison period to EUR 229.0 million (232.4). Sales volumes were in line with H1/2020 while sales prices were higher. The impact of currencies on net sales was EUR -14.6 million.

The net sales of the Americas business area were EUR 139.3 million (150.3) and of the Europe business area EUR 89.7 million (82.1).

EBITDA, OPERATING PROFIT AND RESULT

AprilJune 2021

EBITDA (earnings before interest, taxes, depreciation and amortization) declined to EUR 15.3 million (18.0). This was driven by higher raw material and logistics costs as expected as well as the lower sales and production volumes. These were partially compensated by higher sales prices and improved raw material efficiency. The impact of currencies on EBITDA was EUR -0.3 million.

Operating profit decreased from the comparison period and amounted to EUR 10.3 million (12.4).

Profit before income taxes was EUR 8.7 million (10.6), and profit for the reporting period was EUR 6.1 million (8.4).

JanuaryJune 2021

EBITDA (earnings before interest, taxes, depreciation and amortization) improved to EUR 33.8 million (29.3). Raw material and logistics costs increased but this was compensated by higher sales prices, improved raw material efficiency, and a positive impact from other operating income and expenses. The impact of currencies on EBITDA was EUR -1.7 million.

Operating profit increased to EUR 23.9 million (18.1).

Profit before income taxes was EUR 25.6 million (14.3), and profit for the reporting period was EUR 19.9 million (11.9). Corporate income taxes in the comparison period were positively impacted by the US tax reliefs enacted in the first quarter of 2020 due to the COVID-19 pandemic.

FINANCING

The Group’s net interest-bearing liabilities at nominal value amounted to EUR 35.7 million (56.7) at the end of the review period. The gearing ratio was 22.4% (40.9%) and the equity ratio 40.6% (44.2%).

In January–June, net financial expenses were EUR +1.7 million (-3.8), or +0.7% (-1.6%) of net sales. Fluctuations in exchange rates decreased the net financial expenses by EUR 0.5 million (increased by EUR 1.2 million).

Suominen sold its minority share in Amerplast (Bright Maze Oy) in March. The transaction impacted Suominen’s net financial expenses positively by EUR 3.7 million. The amount consists of the gain on the sale of the shares as well as of the reversal of bad debt provisions recognized of the loan receivables. The effect on cash flow was EUR 11.6 million, consisting of the sales price of the shares and payment of the loan receivables and accrued interests.

Cash flow from operations in April–June was EUR 1.2 million (9.6) and in January–June EUR 17.1 million (19.0), representing a cash flow per share of EUR 0.30 (0.33) and EUR 0.02 (0.17) for the quarter.

In the second quarter the change in working capital was EUR -9.7 million (-7.7).

The decrease in the cash flow from operations in the first half of the year was mainly due to an increase in net working capital. The change in net working capital was EUR -11.8 million (-8.6). In addition, more advance payments of corporate income taxes were paid during the first half of the year compared to the previous year.

In May 2021, Suominen announced that it has extended by one year the maturity of the EUR 100 million syndicated revolving credit facility agreement signed in July 2020. The maturity of the facility is now extended to July 2024.

In June 2021, Suominen issued a senior unsecured bond of EUR 50 million. The six-year bond matures on June 11, 2027 and it carries a coupon interest of 1.5%. The offering was allocated to 19 investors. The bond is listed on the official list of Nasdaq Helsinki Ltd.

CAPITAL EXPENDITURE

In January–June, the gross capital expenditure totaled EUR 10.7 million (2.5), the largest single items being related to the growth investments at the Cressa plant in Italy and the Bethune plant in the USA. Other investments were mainly for maintenance.

Depreciation and amortization for the review period amounted to EUR 9.9 million (11.2).

IMPACTS OF THE COVID-19 PANDEMIC ON SUOMINEN

The pandemic has increased the demand for our products in all our markets. Towards the end of the second quarter of 2021 the demand started to decelerate especially in North America. In the long run the market, and Suominen’s, expectation is that demand will remain above pre-COVID levels.

Both Suominen’s financial position and cash flow have remained strong throughout the pandemic.

Risks related to COVID-19 are described in the short-term risk and uncertainties section.


PROGRESS IN SUSTAINABILITY

During the first half of 2021, we progressed with the actions defined in our sustainability agenda.

We have strong focus on safety and accident prevention, and our long-term target is to have zero lost-time accidents. At the end of June, the number of lost-time accidents (LTA) at Suominen sites was 3 (1 in H1/2020).

Our employee engagement survey, Suominen Vibe, is a tool to systematically measure and develop engagement. During the first half of 2021, we continued our development actions based on the results from the survey conducted late last year. The next Vibe survey is set for autumn 2021.

We are committed to continuously improving our production efficiency and the efficient utilization of natural resources. We continued our active measures towards our targets to reduce energy consumption, greenhouse gas emissions, water consumption and waste to landfill by 20% per ton of product by 2025 compared to the base year of 2019.

We offer a comprehensive portfolio of sustainable nonwovens to our customers and we are continuously developing new and innovative solutions with a reduced environmental impact. Our target is a 50% increase in sales of sustainable nonwovens by 2025 compared to 2019, and to have at least 10 sustainable product launches per year. During the first half of the year, nine sustainable product launches were made.

We launched our new Code of Conduct in the beginning of 2021 and a mandatory training program about the Code will be launched in the third quarter of this year.

Suominen reports progress in its key sustainability KPIs annually.

As part of our Annual Report 2020 published on March 3, 2021 we reported on the progress of our sustainability performance. Our sustainability reporting in 2020 is in accordance with the Core option of the GRI Standards from the Global Reporting Initiative.


INFORMATION ON SHARES AND SHARE CAPITAL

Share capital

The number of Suominen’s registered shares was 58,259,219 shares on June 30, 2021, equaling to a share capital of EUR 11,860,056.00.

Share trading and price

The number of Suominen shares traded on Nasdaq Helsinki from January 1 to June 30, 2021 was 11,967,176 shares, accounting for 20.8% of the average number of shares (excluding treasury shares). The highest price was EUR 6.24, the lowest EUR 5.00 and the volume-weighted average price EUR 5.67. The closing price at the end of review period was EUR 5.57. The market capitalization (excluding treasury shares) was EUR 320.9 million on June 30, 2021.

Treasury shares

On June 30, 2021, Suominen Corporation held 644,013 treasury shares.

As a share-based payment plan vested, in total 34,872 shares were transferred to the participants of the plan in February. In accordance with the decision made in the Annual General Meeting on March 25, 2021, 4,049 shares, which were still in the joint account, were transferred to Suominen Corporation’s treasury shares.

In accordance with the resolution by the Annual General Meeting, in total 16,042 shares were transferred to the members of the Board of Directors as their remuneration payable in shares during the reporting period.

The portion of the remuneration of the members of the Board of Directors paid in shares

The Annual General Meeting held on March 25, 2021 decided that the remuneration payable to the members of the Board remains unchanged. 60% of the annual remuneration is paid in cash and 40% in Suominen Corporation’s shares.

The number of shares forming the remuneration portion payable in shares was determined based on the share value in the stock exchange trading maintained by Nasdaq Helsinki Ltd, calculated as the trade volume-weighted average quotation of the share during the one month period immediately following the date on which the Interim Report of January‒March 2021 of the company was published. The shares were given out of the treasury shares held by the company by the decision of the Board of Directors on May 31, 2021.

Share-based incentive plans for the management and key employees

The Group management and key employees participate in the company’s share-based long-term incentive plans. The plans are described in more details in the Financial Statements and in the Remuneration Report, available on the company’s website www.suominen.fi.

Company's Performance Share Plan currently includes three 3-year performance periods, calendar years 2019-2021, 2020-2022 and 2021-2023. The aim of the Performance Share Plan is to combine the objectives of the shareholders and the persons participating in the plan in order to increase the value of the company in long-term, to build loyalty to the company and to offer them competitive reward plans based on earning and accumulating the company’s shares.

Performance Share Plan: Ongoing performance periods

Performance Period 2019–2021 2020–2022 2021-2023
Incentive based on Total Shareholder Return (TSR) Total Shareholder Return (TSR) Total Shareholder Return (TSR)
Potential reward payment Will be paid partly in Suominen shares and partly in cash in spring 2022 Will be paid partly in Suominen shares and partly in cash in spring 2023 Will be paid partly in Suominen shares and partly in cash in spring 2024
Participants 16 people 18 people 19 people
Maximum number of shares 546,000 756,500 470,000


The President & CEO of the company must hold 50% of the net number of shares given on the basis of the plan, as long as his or her shareholding in total corresponds to the value of his or her annual gross salary. A member of the Executive Team must hold 50% of the net number of shares given on the basis of the plan, as long as his or her shareholding in total corresponds to the value of half of his or her annual gross salary. Such a number of shares must be held as long as the participant’s employment or service in a group company continues.

Matching Restricted Share Plan 20192021

Suominen also has a Matching Restricted Share Plan for selected key employees in the Suominen Group. The aim of the MRSP is to align the objectives of the shareholders and key employees in order to increase the value of the company in the long-term, to retain key employees at the company, and to offer them a competitive reward plan that is based on acquiring, receiving and accumulating the company’s shares. The prerequisite for receiving a reward from the plan is that a participant acquires the company’s shares, amounting to the number resolved by the Board.

If the prerequisites set for a participant have been fulfilled and his or her employment or service in a company belonging to the Suominen Group is in force at the time of the reward payment, he or she will receive matching shares as a reward.

The plan includes vesting periods, the duration of which is resolved by the Board. The potential reward will be paid partly in shares and partly in cash after a vesting period. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the plan participants.

The prerequisite for reward payment is that a participant’s employment or service is in force upon reward payment. The plan rewards to be allocated in 2019–2021 can amount to a maximum total of 200,000 Suominen Corporation shares also including the proportion to be paid in cash.

The first vesting period of the Matching Restricted Share Plan ended in September 2020 and in total 9,352 shares were transferred to the participants.

ANNUAL GENERAL MEETING

The Annual General Meeting (AGM) of Suominen Corporation was held on March 25, 2021.

The AGM adopted the Financial Statements and the Consolidated Financial Statements for the financial year 2020 and discharged the members of the Board of Directors and the President & CEO from liability for the financial year 2020. The AGM approved the Remuneration Report for the governing bodies and the Board of Directors' proposals concerning forfeiture of the shares entered in a joint book-entry account and of the rights attached to such shares.

The AGM decided, in accordance with the proposal by the Board of Directors, that a dividend of EUR 0.10 and in addition, a return of capital of EUR 0.10 per share will be paid.

The AGM confirmed the remuneration of the Board of Directors remains unchanged. The Chair will be paid an annual fee of EUR 66,000 and the Deputy Chair and other Board members an annual fee of EUR 31,000. Chair of the Audit Committee will be paid an additional fee of EUR 10,000. Further, the members of the Board will receive a fee for each Board and Committee meeting as follows: EUR 500 for each meeting held in the home country of the respective member, EUR 1,000 for each meeting held elsewhere than in the home country of the respective member and EUR 500 for each meeting held as a telephone conference.

60% of the remuneration is paid in cash and 40% in Suominen Corporation’s shares. Compensation for expenses is paid in accordance with the company's valid travel policy.

The AGM decided that the number of Board members remains unchanged at six (6). Mr. Andreas Ahlström, Mr. Björn Borgman, Ms. Nina Linander, Ms. Sari Pajari-Sederholm and Ms. Laura Raitio were re-elected as members of the Board. Mr. Jaakko Eskola was elected as a new member of the Board.

Mr. Jaakko Eskola was elected as the new Chair of the Board of Directors.

Ernst & Young Oy, Authorised Public Accountant firm, was re-elected as the auditor of the company for the next term of office in accordance with the Articles of Association. Ernst & Young Oy appointed Mr. Toni Halonen, Authorised Public Accountant, as the principally responsible auditor of the company.

The AGM authorized the Board of Directors to decide on the repurchase of the company’s own shares and to resolve on the issuance of shares and granting of options and the issuance of special rights entitling to shares. The terms and conditions of the authorization are explained later in this interim report.

Suominen published a stock exchange release on March 25, 2021 concerning the resolutions of the Annual General Meeting and the organizing meeting of the Board of Directors. The stock exchange release and an introduction of the new Board members can be viewed on Suominen’s website at www.suominen.fi.

In compliance with the resolution of the Annual General Meeting, on April 8, 2021Suominen paid out dividends and return of capital in total of EUR 11.5 million for 2020, corresponding to EUR 0.20 per share.

Organizing meeting and permanent committees of the Board of Directors

In its organizing meeting held after the AGM, the Board of Directors elected Andreas Ahlström as Deputy Chair of the Board.

The Board of Directors elected from among its members the members for the Audit Committee and Personnel and Remuneration Committee. Nina Linander was re-elected as the Chair of the Audit Committee and Andreas Ahlström and Laura Raitio were re-elected as members. Jaakko Eskola was elected as the Chair of the Personnel and Remuneration Committee and Björn Borgman and Sari Pajari-Sederholm were re-elected as members.

Authorizations of the Board of Directors

The Annual General Meeting (AGM) held on March 25, 2021 authorized the Board of Directors to decide on the repurchase a maximum of 400,000 of the company’s own shares. The company’s own shares shall be repurchased otherwise than in proportion to the holdings of the shareholders by using the non-restricted equity through trading on regulated market organized by Nasdaq Helsinki Ltd at the market price prevailing at the time of acquisition. The shares shall be repurchased and paid in accordance with the rules of Nasdaq Helsinki Ltd and Euroclear Finland Ltd. The shares shall be repurchased to be used in company’s share-based incentive programs, in order to disburse the remuneration of the members of the Board of Directors, for use as consideration in acquisitions related to the company’s business, or to be held by the company, to be conveyed by other means or to be cancelled. The Board of Directors shall decide on other terms and conditions related to the repurchase of the company’s own shares. The repurchase authorization shall be valid until June 30, 2022 and it revokes all earlier authorizations to repurchase company’s own shares.

The Annual General Meeting (AGM) held on March 25, 2021 authorized the Board of Directors to decide on issuing new shares and/or conveying the company’s own shares held by the company and/or granting options and other special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act. New shares may be issued, and the company’s own shares may be conveyed to the company’s shareholders in proportion to their current shareholdings in the company; or by waiving the shareholder’s pre-emption right, through a directed share issue if the company has a weighty financial reason to do so, such as, for example, using the shares as consideration in possible acquisitions or other arrangements related to the company’s business, as financing for investments, using shares as part of the company’s incentive program or using the shares for disbursing the portion of the Board members’ remuneration that is to be paid in shares. The new shares may also be issued without payment to the company itself. New shares may be issued and/or company’s own shares held by the company or its group company may be conveyed at the maximum amount of 5,000,000 shares in aggregate.

The Board of Directors may grant options and other special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act, which carry the right to receive against payment new shares or own shares held by the company. The right may also be granted to the company’s creditor in such a manner that the right is granted on condition that the creditor’s receivable is used to set off the subscription price (“Convertible Bond”). However, options and other special rights referred to in Chapter 10, Section 1 of the Companies Act cannot be granted as part of the company’s remuneration plan.

The maximum number of new shares that may be subscribed and own shares held by the company that may be conveyed by virtue of the options and other special rights granted by the company is 5,000,000 shares in total which number is included in the maximum number stated above.

The authorizations shall revoke all earlier authorizations regarding share issue and issuance of special rights entitling to shares. The Board of Directors shall decide on all other terms and conditions related to the authorizations. The authorizations shall be valid until June 30, 2022.

NOTIFICATIONS UNDER CHAPTER 9, SECTION 5 OF THE SECURITIES MARKET ACT

Suominen Corporation received a notification on January 15, 2021 referred to Chapter 9, Section 5 and 6 of the Securities Market Act. According to the notification, the shareholding of companies controlled by Mr. Erkki Etola in Suominen Corporation has crossed the 15% flagging threshold.

Suominen Corporation received a notification on January 18, 2021 referred to Chapter 9, Section 5 and 6 of the Securities Market Act. According to the notification, the shareholding of Elo Mutual Pension Insurance Company in Suominen Corporation has fallen under the 5% flagging threshold

Suominen Corporation received a notification on April 16, 2021 referred to in Chapter 9, Section 5 and 6 of the Securities Market Act. According to the notification, the shareholding of Bolero Holdings SARL in Suominen Corporation has fallen below the 5% flagging threshold.

Suominen Corporation received a notification on April 29, 2021 referred to Chapter 9, Section 5 and 6 of the Securities Market Act. According to the notification, the shareholding of Nordea Funds Ltd in Suominen Corporation has exceeded the threshold of 5 percent.

SHORT TERM RISKS AND UNCERTAINTIES

The COVID-19 pandemic continues to cause uncertainty in Suominen’s business environment. The key risks related to the virus concern the health and safety of Suominen personnel and customers, possible shortages of raw materials and issues linked to logistics, as well as potential closures of customers’ or our own plants due to virus infections or authority decisions remain valid at least until there is broad enough vaccination coverage in the countries relevant to Suominen’s business.

We have implemented extensive precautions to protect the health and safety of our employees and to ensure business continuity and progress of our strategic projects during the pandemic. We continuously monitor the raw material situation closely and we have identified risk mitigation measures such as utilization of supplementary raw material sources.

The very recent demand slowdown has naturally affected some of our customers. So far we have not experienced significant issues with customer payments and hence we do not see that our customer credit risks would have materially increased. We continue to monitor the financial positions and payment behavior of our customers. The COVID-19 pandemic has not increased Suominen’s risk of impairment losses on non-current assets.

Suominen’s other risks and uncertainties include, but are not limited to: risks related to manufacturing, competition, raw material prices and availability and customer specific volumes and credits, changes in legislation, political environment or economic conditions and investments, and financial risks.

A more detailed description of risks is available in Suominen’s Annual Report 2020 at suominen.fi/investors.

BUSINESS ENVIRONMENT

Suominen’s nonwovens are, for the most part, used in daily consumer goods, such as wet wipes as well as in hygiene and medical products. In these target markets of Suominen, the general economic situation determines the development of consumer demand, even though the demand for consumer goods is not very cyclical in nature. North America and Europe are the largest market areas for Suominen. In addition, the company operates in the South American markets. The growth in the demand for nonwovens has typically exceeded the growth of gross domestic product by a couple of percentage points.

The market expectation is that in the long run the end user demand for wipes will remain above pre-COVID levels. However, towards the end of the second quarter, especially our North American customers started to experience a sudden deceleration of demand, which in combination with extraordinary stockpiling throughout the entire supply chain has created an imbalance of inventories. This has impacted also Suominen’s orders, although in several cases we have been able to benefit from our position as the preferred supplier of our customers. We expect that the demand for our products will recover once this temporary imbalance is cleared. Our current view is that the recovery will start in the fourth quarter.

In Europe, another specific factor impacting demand has been the earlier uncertainty regarding the final formulation of the Single-Use Plastic Directive (SUPD) that postponed our customers’ development projects and now that the formulation is clear, our orders have been affected as converters and etailers seek to sell out their existing stocks.

EVENTS AFTER THE REPORTING PERIOD

Profit warning on August 12, 2021: Suominen reduces its outlook for 2021

New outlook: Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 will decrease from 2020 due to the slowdown in the demand for nonwovens in the second half of 2021 as well as some continuing volatility in the raw material and transportation markets.  In 2020, Suominen’s comparable EBITDA was EUR 60.9 million.

Previous outlook: Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 will be in line with 2020. The demand for nonwovens is expected to remain strong, however volatility in the raw material and transportation markets has increased uncertainty and may impact the result negatively. In 2020, Suominen’s comparable EBITDA was EUR 60.9 million.

OUTLOOK FOR 2021

As announced on August 12, 2021Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 will decrease from 2020 due to the slowdown in the demand for nonwovens in the second half of 2021 as well as some continuing volatility in the raw material and transportation markets. In 2020, Suominen’s comparable EBITDA was EUR 60.9 million.

CORPORATE GOVERNANCE AND REMUNERATION STATEMENTS

Suominen has prepared a separate Corporate Governance Statement and a Remuneration Report for
2020, which comply with the recommendations of the Finnish Corporate Governance Code for listed
companies. The statements also cover other central areas of corporate governance. The statements have been published on Suominen's website, separately from the Report of the Board of Directors, at www.suominen.fi

AUDIOCAST AND CONFERENCE CALL

Petri Helsky, President & CEO, and Toni Tamminen, CFO, will present the result in English in an audiocast for analysts, investors and media on August 13 at 11:00 a.m. (EEST). The audiocast can be followed at https://suominen.videosync.fi/2021-q2-results. The recording of the audiocast and the presentation material will be available after the event at www.suominen.fi

Conference call participants are requested to dial on:
SE: +46 856 642 651
UK: +44 333 300 0804
US: +1 631 913 1422

The confirmation code for joining the conference call is 21713834#.

NEXT FINANCIAL REPORT

Suominen Corporation will publish its Interim Report for January–September 2021 on Wednesday October 27, 2020 approximately at 9:30 a.m. (EEST).

SUOMINEN GROUP JANUARY 1 JUNE30, 2021

The figures in these half-year financial statements are mainly presented in EUR thousands. As a result of rounding differences, the figures presented in the tables do not necessarily add up to total.

This half-year report has not been audited.

This half-year report has been prepared in accordance with the principles defined in IAS 34 Interim Financial Reporting. The principles for preparing the half-year report are the same as those used for preparing the consolidated financial statements for 2020, with the exception of the effect of the new accounting standards and interpretations which have been applied from 1.1.2021.

The new or amended standards or interpretations applicable from 1.1.2021 are not material for Suominen Group.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

       
EUR thousand 30.6.2021 30.6.2020 31.12.2020
Assets      
Non-current assets      
Goodwill 15,496 15,496 15,496
Intangible assets 15,153 18,335 16,748
Property, plant and equipment 111,482 111,587 104,666
Right-of-use assets 16,738 13,037 17,784
Loan receivables 3,650 3,978
Equity instruments 421 777 768
Other non-current receivables 76 61 73
Deferred tax assets 1,226 1,980 4,034
Total non-current assets 160,592 164,922 163,548
       
Current assets      
Inventories 52,302 38,718 35,431
Trade receivables 56,271 60,693 51,128
Loan receivables 3,349 3,476
Other current receivables 5,880 7,207 5,675
Assets for current tax 1,500 581 247
Cash and cash equivalents 115,964 38,666 57,877
Total current assets 231,916 149,214 153,833
       
Total assets 392,508 314,136 317,381
       
Equity and liabilities      
Equity      
Share capital 11,860 11,860 11,860
Share premium account 24,681 24,681 24,681
Reserve for invested unrestricted equity 75,692 81,361 81,361
Treasury shares -44 -44
Fair value and other reserves -7 2 -7
Exchange differences -9,514 -2,601 -13,933
Retained earnings 56,673 23,291 41,962
Total equity attributable to owners of the parent 159,386 138,551 145,882
       
Liabilities      
Non-current liabilities      
Deferred tax liabilities 13,750 14,049 13,320
Liabilities from defined benefit plans 724 769 774
Non-current provisions 1,853 1,656 1,797
Non-current lease liabilities 14,040 9,229 14,892
Other non-current liabilities 6 17 17
Debentures 132,560 82,277 82,862
Total non-current liabilities 162,933 107,997 113,662
       
Current liabilities      
Current provisions 306 250
Current lease liabilities 2,628 3,139 2,539
Other current interest-bearing liabilities 5,000
Liabilities for current tax 772 664 415
Trade payables and other current liabilities 66,483 58,786 54,634
Total current liabilities 70,190 67,588 57,838
       
Total liabilities 233,123 175,585 171,499
       
Total equity and liabilities 392,508 314,136 317,381

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

           
           
EUR thousand 4-6/
2021
4-6/
2020
1-6/
2021
1-6/
2020
1-12/
2020
Net sales 113,647 122,170 228,980 232,373 458,893
Cost of goods sold -96,913 -102,656 -192,038 -199,569 -389,123
Gross profit 16,733 19,514 36,941 32,803 69,770
Other operating income 863 785 1,707 1,337 2,584
Sales, marketing and administration expenses -6,905 -7,146 -13,527 -14,290 -27,946
Research and development expenses -594 -645 -1,194 -1,325 -2,767
Other operating expenses 219 -117 -19 -470 -2,150
Operating profit 10,317 12,391 23,909 18,055 39,492
Net financial expenses -1,613 -1,813 1,653 -3,757 -5,582
Profit before income taxes 8,704 10,579 25,562 14,298 33,910
Income taxes -2,581 -2,179 -5,666 -2,353 -3,794
Profit for the period 6,123 8,400 19,896 11,945 30,116
           
Earnings per share, EUR          
Basic 0.11 0.15 0.35 0.21 0.52
Diluted 0.11 0.15 0.34 0.21 0.52

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR thousand 4-6/2021 4-6/2020 1-6/2021 1-6/2020 1-12/2020
           
Profit for the period 6,123 8,400 19,896 11,945 30,116
           
Other comprehensive income:          
Other comprehensive income that will be subsequently reclassified to profit or loss          
Exchange differences 455 -2,808 4,723 -3,276 -15,504
Reclassified to profit or loss -327 -327 -327
Income taxes related to other comprehensive income 131 -227 -305 33 929
Total 586 -3,362 4,418 -3,571 -14,902
Other comprehensive income that will not be subsequently reclassified to profit or loss          
Fair value changes of equity instruments -8
Remeasurements of defined benefit plans -10
Income taxes related to other comprehensive income 3
Total -15
           
Total other comprehensive income 586 -3,362 4,418 -3,571 -14,917
           
Total comprehensive income for the period 6,709 5,038 24,314 8,375 15,199


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR thousand Share capital Share premium account Reserve for invested unrestricted equity Treasury shares
Equity 1.1.2021 11,860 24,681 81,361 -44
Profit for the period
Other comprehensive income
Total comprehensive income
Share-based payments
Conveyance of treasury shares 90 44
Dividends and return of capital -5,759
Equity 30.6.2021 11,860 24,681 75,692

 

EUR thousand Exchange differences Fair value and other reserves Retained earnings Total equity attributable to owners of the parent
Equity 1.1.2021 -13,933 -7 41,962 145,882
Profit for the period 19,896 19,896
Other comprehensive income 4,418 4,418
Total comprehensive income 4,418 19,896 24,314
Share-based payments 618 618
Conveyance of treasury shares -44 90
Dividends and return of capital -5,759 -11,519
Equity 30.6.2021 -9,514 -7 56,673 159,386

 

EUR thousand Share capital Share premium account Reserve for invested unrestricted equity Treasury shares
Equity 1.1.2020 11,860 24,681 81,269 -44
Profit for the period
Other comprehensive income
Total comprehensive income
Share-based payments
Conveyance of treasury shares 92
Dividends paid
Equity 30.6.2020 11,860 24,681 81,361 -44

 

EUR thousand Exchange differences Fair value and other reserves Retained earnings Total equity attributable to owners of the parent
Equity 1.1.2020 707 264 13,715 132,452
Profit for the period 11,945 11,945
Other comprehensive income -3,309 -262 -3,571
Total comprehensive income -3,309 -262 25,660 8,375
Share-based payments 508 508
Conveyance of treasury shares 92
Dividends paid -2,876 -2,876
Equity 30.6.2020 -2,601 2 23,291 138,551

 

EUR thousand Share capital Share premium account Reserve for invested unrestricted equity Treasury shares
Equity 1.1.2020 11,860 24,681 81,269 -44
Profit for the period
Other comprehensive income
Total comprehensive income
Share-based payments
Conveyance of treasury shares 92
Dividends paid
Equity 31.12.2020 11,860 24,681 81,361 -44

 

EUR thousand Exchange differences Fair value and other reserves Retained earnings Total equity attributable to owners of the parent
Equity 1.1.2020 707 264 13,715 132,452
Profit for the period 30,116 30,116
Other comprehensive income -14,640 -270 -7 -14,917
Total comprehensive income -14,640 -270 30,109 15,199
Share-based payments 1,015 1,015
Conveyance of treasury shares 92
Dividends paid -2,876 -2,876
Equity 31.12.2020 -13,933 -7 41,962 145,882

CONSOLIDATED STATEMENT OF CASH FLOWS

EUR thousand 1-6/2021 1-6/2020 1-12/2020
       
Cash flow from operations      
Profit for the period 19,896 11,945 30,116
Total adjustments to profit for the period 14,561 18,121 34,626
Cash flow before changes in net working capital 34,457 30,067 64,742
Change in net working capital -11,845 -8,612 -1,023
Financial items -1,456 -2,097 -4,289
Income taxes -4,027 -353 -2,438
Cash flow from operations 17,129 19,005 56,991
       
Cash flow from investments      
Investments in property, plant and equipment and intangible assets -9,101 -3,923 -10,885
Sales proceeds from property, plant and equipment and intangible assets 12
Sales proceeds sale of equity investments 2,123
Cash flow from investments -6,978 -3,923 -10,873
       
Cash flow from financing      
Drawdown of non-current interest-bearing liabilities 50,000
Issuance costs of the bonds -898
Drawdown of current interest-bearing liabilities 15,000 15,000
Repayment of current interest-bearing liabilities -1,326 -25,585 -31,968
Repayment in loan receivables 9,301
Dividends and return of capital paid -11,520 -2,876 -2,876
Cash flow from financing 45,557 -13,462 -19,845
       
Change in cash and cash equivalents 55,709 1,621 26,274
       
Cash and cash equivalents at the beginning of the period 57,877 37,741 37,741
Effect of changes in exchange rates 2,379 -696 -6,138
Change in cash and cash equivalents 55,709 1,621 26,274
Cash and cash equivalents at the end of the period 115,964 38,666 57,877

KEY RATIOS

  4-6/
2021
4-6/
2020
1-6/
2021
1-6/
2020
1-12/
2020
Change in net sales, % * -7.0 17.7 -1.5 8.8 11.5
Gross profit, as percentage of net sales, % 14.7 16.0 16.1 14.1 15.2
Comparable EBITDA, as percentage of net sales, % 13.4 14.7 14.8 12.6 13.3
Operating profit, as percentage of net sales, % 9.1 10.1 10.4 7.8 8.6
Net financial items, as percentage of net sales, % -1.4 -1.5 0.7 -1.6 -1.2
Profit before income taxes, as percentage of net sales, % 7.7 8.7 11.2 6.2 7.4
Profit for the period, as percentage of net sales, % 5.4 6.9 8.7 5.1 6.6
Gross capital expenditure, EUR thousand 5,448 1,606 10,673 2,455 10,406
Depreciation and amortization, EUR thousand 4,960 5,598 9,902 11,215 21,432
Return on equity, rolling 12 months, % 25.7 7.9 21.6
Return on invested capital, rolling 12 months, % 17.9 8.9 16.7
Equity ratio, % 40.6 44.2 46.0
Gearing, % 22.4 40.9 25.4
Average number of personnel 709 685 689
Earnings per share, EUR, basic 0.11 0.15 0.35 0.21 0.52
Earnings per share, EUR, diluted 0.11 0.15 0.34 0.21 0.52
Cash flow from operations per share, EUR 0.02 0.17 0.30 0.33 0.99
Equity per share, EUR 2.77 2.41 2.53
Number of shares, end of period, excluding treasury shares 57,615,206 57,558,989 57,568,341
Share price, end of period, EUR 5.57 3.87 5.08
Share price, period low, EUR 5.00 2.00 2.00
Share price, period high, EUR 6.24 3.99 5.36
Volume weighted average price during the period, EUR 5.67 2.84 4.29
Market capitalization, EUR million 320.9 222.8 292.4
Number of traded shares during the period 11,967,176 3,573,603 12,937,753
Number of traded shares during the period, % of average number of shares 20.8 6.2 22.5

* Compared with the corresponding period in the previous year.

    30.6.2021 30.6.2020 31.12.2020
Interest-bearing net debt, EUR thousands        
Non-current interest-bearing liabilities, nominal value   149,040 94,229 99,892
Current interest-bearing liabilities, nominal value   2,628 8,139 2,539
Interest-bearing receivables and cash and cash equivalents   -115,964 -45,665 -65,331
Interest-bearing net debt   35,705 56,703 37,101

CALCULATION OF KEY RATIOS AND ALTERNATIVE PERFORMANCE MEASURES

Key ratios per share are either IFRS key ratios (earnings per share) or required by Ordinance of the Ministry of Finance in Finland or alternative performance measures (cash flow from operations per share).

Some of the other key ratios Suominen publishes are alternative performance measures. An alternative performance measure is a key ratio, which has not been defined in IFRS standards. Suominen believes that the use of alternative performance measures provides useful information for example to investors regarding the Group's financial and operating performance and makes it easier to make comparisons between the reporting periods.

The link between the components of the key ratios per share and the consolidated financial statements is presented in the consolidated financial statements of 2020. The link between the components of the alternative performance measures and the consolidated financial statements is presented in Suominen’s Annual Report for 2020.

Calculation of key ratios per share

Earnings per share                                
                                

Basic earnings per share (EPS)



  Profit for the period
= Share-issue adjusted average number of shares excluding treasury shares

 
       
       
Diluted earnings per share (EPS)



  Profit for the period
= Average diluted share-issue adjusted number of shares excluding treasury shares

 

 

EUR thousand   30.6.2021 30.6.2020 31.12.2020
Profit for the period   19,896 11,945 30,116
         
         
Average share-issue adjusted number of shares   57,592,913 57,535,148 57,549,842
Average diluted share-issue adjusted number of shares excluding treasury shares   57,981,212 57,687,192 57,796,591
         
Earnings per share        
         
EUR        
Basic   0.35 0.21 0.52
Diluted   0.34 0.21 0.52

 

       

Cash flow from operations per share
        

Cash flow from operations per share



  Cash flow from operations
= Share-issue adjusted number of shares excluding treasury shares, end of reporting period

 

 

    30.6.2021 30.6.2020 31.12.2020
Cash flow from operations, EUR thousand   17,129 19,005 56,991
Share-issue adjusted number of shares excluding treasury shares, end of reporting period   57,615,206 57,558,989 57,568,341
Cash flow from operations per share, EUR   0.30 0.33 0.99

Equity per share

Equity per share



  Total equity attributable to owners of the parent
= Share-issue adjusted number of shares excluding treasury shares, end of reporting period

 

 

    30.6.2021 30.6.2020 31.12.2020
Total equity attributable to owners of the parent, EUR thousand   159,386 138,551 145,882
Share-issue adjusted number of shares excluding treasury shares, end of reporting period   57,615,206 57,558,989 57,568,341
Equity per share, EUR   2.77 2.41 2.53

                                            

Market capitalization

Market capitalization = Number of shares at the end of reporting period excluding treasury shares x share price at the end of period

 

    30.6.2021 30.6.2020 31.12.2020
Number of shares at the end of reporting period excluding treasury shares   57,615,206 57,558,989 57,568,341
Share price at end of the period, EUR 5.57 3.87 5.08
Market capitalization, EUR million   320.9 222.8 292.4

Shareturnover

Share turnover = The proportion of number of shares traded during the period to weighted average number of shares excluding treasury shares

 

    30.6.2021 30.6.2020 31.12.2020
Number of shares traded during the period   11,967,176 3,573,603 12,937,753
Average number of shares excluding treasury shares 57,592,913 57,535,148 57,549,842
Share turnover, %   20.8 6.2 22.5

Calculation of key ratios and alternative performance measures

Operating profit and comparable operating profit

Operating profit (EBIT) = Profit before income taxes + net financial expenses
         
Comparable operating profit (EBIT) = Profit before income taxes + net financial expenses, adjusted with items affecting comparability

In order to improve the comparability of result between reporting periods, Suominen presents comparable operating profit as an alternative performance measure. Operating profit is adjusted with material items that are considered to affect comparability between reporting periods. These items include, among others, impairment losses or reversals of impairment losses, gains or losses from the sales of property, plant and equipment or intangible assets or other assets and restructuring costs. Suominen did not have any items affecting comparability in 2021 or 2020.

EBITDA and comparable EBITDA

EBITDA = EBIT + depreciation, amortization and impairment losses
Comparable EBITDA = EBIT + depreciation, amortization and impairment losses, adjusted with items affecting comparability

 

EUR thousand   30.6.2021 30.6.2020 31.12.2020
Operating profit   23,909 18,055 39,492
+ Depreciation, amortization and impairment losses 9,902 11,215 21,432
EBITDA   33,811 29,270 60,924

Gross capital expenditure

EUR thousand   30.6.2021 30.6.2020 31.12.2020
Increases in intangible assets   70 105 306
Increases in property, plant and equipment 10,604 2,350 10,100
Gross capital expenditure   10,673 2,455 10,406

Interest-bearing net debt

It is the opinion of Suominen that presenting interest-bearing liabilities not only at amortized cost but also at nominal value gives relevant additional information to the investors.

Interest-bearing net debt = Interest-bearing liabilities at nominal value - interest-bearing receivables - cash and cash equivalents

 

EUR thousand   30.6.2021 30.6.2020 31.12.2020
Interest-bearing liabilities   149,229 99,645 100,293
Tender and issuance costs of the debentures   2,440 2,723 2,138
Interest bearing receivables   -6,999 -7,454
Cash and cash equivalents -115 964 -38,666 -57,877
Interest-bearing net debt   35,705 56,703 37,101
         
Interest-bearing liabilities   149,229 99,645 100,293
Tender and issuance costs of the debentures   2,440 2,723 2,138
Nominal value of interest-bearing liabilities   151,669 102,368 102,431

Return on equity (ROE), %

Return on equity (ROE), % = Profit for the reporting period (rolling 12 months) x 100
    Total equity attributable to owners of the parent (quarterly average)

 

EUR thousand 30.6.2021 30.6.2020 31.12.2020
Profit for the reporting period (rolling 12 months) 38,067 10,670 30,116
       
Total equity attributable to owners of the parent 30.6.2020 / 30.6.2019 / 31.12.2019 138,551 133,178 132,452
Total equity attributable to owners of the parent 30.9.2020 / 30.9.2019 / 31.3.2020 144,074 136,871 135,868
Total equity attributable to owners of the parent 31.12.2020 / 31.12.2019 / 30.6.2020 145,882 132,452 138,551
Total equity attributable to owners of the parent 31.3.2021/ 31.3.2020 / 30.9.2020 152,227 135,868 144,074
Total equity attributable to owners of the parent 30.6.2021 / 30.6.2020 / 31.12.2020 159,386 138,551 145,882
Average 148,024 135,384 139,365
       
Return on equity (ROE), % 25.7 7.9 21.6

        

Invested capital

Invested capital = Total equity attributable to owners of the parent + interest-bearing liabilities
EUR thousand   30.6.2021 30.6.2020 31.12.2020  
Total equity attributable to owners of the parent   159,386 138,551 145,882  
Interest-bearing liabilities   149,229 99,645 100,293  
Invested capital   308,615 238,195 246,175  

Return on invested capital (ROI), %

Return on invested capital (ROI), % = Operating profit + financial income (rolling 12 months) x 100
    Invested capital, quarterly average

 

EUR thousand 30.6.2021 30.6.2020 31.12.2020
Operating profit (rolling 12 months) 45,345 20,568 39,492
Financial income (rolling 12 months) 652 1,001 925
Total 45,997 21,569 40,416
       
Invested capital 30.6.2020 / 30.6.2019 / 31.12.2019 238,195 249,752 241,615
Invested capital 30.9.2020 / 30.9.2019 / 31.3.2020 240,368 246,660 240,761
Invested capital 31.12.2020 / 31.12.2019 / 30.6.2020 246,175 241,615 238,195
Invested capital 31.3.2021/ 31.3.2020 / 30.9.2020 252,608 240,761 240,368
Invested capital 30.6.2021 / 30.6.2020 / 31.12.2020 308,615 238,195 246,175
Average 257,192 243,397 241,423
       
Return on invested capital (ROI), % 17.9 8.9 16.7

Equity ratio, %

Equity ratio, % = Total equity attributable to owners of the parent x 100
    Total assets - advances received

 

EUR thousand 30.6.2021 30.6.2020 31.12.2020
Total equity attributable to owners of the parent 159,386 138,551 145,882
       
Total assets 392,508 314,136 317,381
Advances received -190 -442 -23
  392,318 313,694 317,358
       
Equity ratio, % 40.6 44.2 46.0

Gearing, %

Gearing, % = Interest-bearing net debt x 100  
    Total equity attributable to owners of the parent

 

EUR thousand 30.6.2021 30.6.2020 31.12.2020
Interest-bearing net debt 35,705 56,703 37,101
Total equity attributable to owners of the parent 159,386 138,551 145,882
Gearing, % 22.4 40.9 25.4

NET SALES BY GEOGRAPHICAL MARKET AREA

EUR thousand 1-6/2021 1-6/2020 1-12/2020
Finland 1,367 1,692 3,180
Rest of Europe 85,473 76,184 156,060
North and South America 141,096 152,515 295,975
Rest of the world 1,044 1,982 3,678
Total 228,980 232,373 458,893

QUARTERLY SALES DEVELOPMENT BY BUSINESS AREA

  2021 2020
EUR thousand 4-6 1-3 10-12 7-9 4-6 1-3
Americas 67,402 71,904 66,829 71,947 77,162 73,170
Europe 46,251 43,432 44,276 43,542 45,047 37,054
Unallocated exchange differences and eliminations -6 -2 -19 -54 -38 -21
Total 113,647 115,333 111,086 115,435 122,170 110,203

QUARTERLY DEVELOPMENT

    2021 2020
EUR thousand 4-6 1-3 10-12 7-9 4-6 1-3
Net sales 113,647 115,333 111,086 115,435 122,170 110,203
Comparable EBITDA 15,277 18,534 13,546 18,107 17,989 11,282
as % of net sales 13.4 16.1 12.2 15.7 14.7 10.2
EBITDA 15,277 18,534 13,546 18,107 17,989 11,282
as % of net sales 13.4 16.1 12.2 15.7 14.7 10.2
Items affecting comparability
Operating profit 10,317 13,592 8,530 12,907 12,391 5,664
as % of net sales 9.1 11.8 7.7 11.2 10.1 5.1
Net financial items -1,613 3,266 -64 -1,761 -1,813 -1,945
Profit before income taxes 8,704 16,858 8,466 11,146 10,579 3,719
as % of net sales 7.7 14.6 7.6 9.7 8.7 3.4

RELATED PARTY INFORMATION

The related parties of Suominen include the members of the Board of Directors, President & CEO and the members of the Corporate Executive Team as well as their family members and their controlled companies. In addition, shareholders who have a significant influence in Suominen through share ownership are included in related parties. Suominen has no associated companies.

In its transactions with related parties Suominen follows the same commercial terms as in transactions with third parties.

The Annual General Meeting held on March 25, 2021 resolved that 40% of the annual remuneration for the Board of Directors is paid in Suominen Corporation’s shares. The number of shares transferred to the members of the Board of Directors as their remuneration payable in shares for 2021 was 16,042 shares. The shares were transferred on May 31, 2021 and the value of the transferred shares totaled EUR 90,445.

One of Suominen’s share-based plans vested and shares were transferred to the participants of the plan in February. The President & CEO received 12,002 shares, and the value of the shares and portion settled in cash totaled EUR 128 thousand. The number of the shares transferred to other members of the Executive Team was 14,742 shares. The value of the shares and the portion settled in cash was EUR 146 thousand


CHANGES IN PROPERTY, PLANT AND EQUIPMENTINTANGIBLE ASSETSAND RIGHT-OF-USE ASSETS

  30.6.2021  
EUR thousand Property, plant and equipment Intangible assets Right-of-use assets
Carrying amount at the beginning of the period 104,666 16,748 17,784
Capital expenditure and increases 10,604 70 325
Disposals and decreases -17
Depreciation, amortization and impairment losses -6,590 -1,719 -1,593
Exchange differences and other changes 2,802 55 239
Carrying amount at the end of the period 111,482 15,153 16,738

 

  30.6.2020 31.12.2020
EUR thousand Property, plant and equipment Intangible assets Right-of-use assets Property, plant and equipment Intangible assets Right-of-use assets
Carrying amount at the beginning of the period 121,584 20,020 14,319 121,584 20,020 14,319
Capital expenditure and increases 2,350 105 536 10,100 306 7,410
Disposals and decreases -80
Depreciation, amortization and impairment losses -7,616 -1,791 -1,808 -14,354 -3,549 -3,530
Exchange differences and other changes -4,732 1 -10 -12,664 -29 -335
Carrying amount at the end of the period 111,586 18,335 13,037 104,666 16,748 17,784

Goodwill is not included in intangible assets.

CHANGES IN INTEREST-BEARING LIABILITIES

EUR thousand 1-6/2021 1-6/2020 1-12/2020
Total interest-bearing liabilities at the beginning of the period 100,293 109,163 109,163
Current liabilities at the beginning of the period 2,539 16,986 16,986
Repayment of current liabilities, cash flow items -1,326 -25,585 -31,968
Drawdown of current liabilities, cash flow items 15,000 15,000
Increases in current liabilities, non-cash flow items 114 186 276
Decreases of current liabilities, non-cash flow items -20 -5 -625
Reclassification from non-current liabilities 1,285 1,566 3,001
Exchange rate difference, non-cash flow item 37 -10 -130
Current liabilities at the end of the period 2,628 8,139 2,539
       
Non-current liabilities at the beginning of the period 14,892 10,464 10,464
Increases in non-current liabilities, non-cash flow items 218 350 7,744
Decreases of non-current liabilities, non-cash flow items -5 -3
Reclassification to current liabilities -1,285 -1,566 -3,001
Exchange rate difference, non-cash flow item 220 -18 -312
Non-current liabilities at the end of the period 14,040 9,229 14,892
       
Non-current debentures at the beginning of the period 82,862 81,714 81,714
Increases in debentures 50,000
Periodization of debentures to amortized cost, non-cash flow items 596 563 1,148
Tender and issuance costs of the debentures, cash flow items -898
Non-current debentures at the end of the period 132,560 82,277 82,862
Total interest-bearing liabilities at the end of the period 149,229 99,645 100,293

CONTINGENT LIABILITIES

                                        

         
EUR thousands 30.6.2021   30.6.2020 31.12.2020
         
Other commitments        
Leasing commitments 121   158 104
Contractual commitments to acquire property, plant and equipment 2,840   1,877 6,586
Commitments to leases not yet commenced 65   152 34
         
Guarantees        
On own behalf 3,875   7,649 4,317
Other own commitments 29,107   30,127 33,452
  32,982   37,776 37,769

NOMINAL AND FAIR VALUES OF DERIVATIVE INSTRUMENTS

  30.6.2021 30.6.2020 31.12.2020
EUR thousand Nominal value Fair
value
Nominal
value
Fair
value
Nominal
value
Fair
value
Currency forward contracts            
Hedge accounting not applied 2,777 -48 2,480 -46 2,991 60

FINANCIAL ASSETS BY CATEGORY

a. Fair value through profit or loss
b. Financial assets at amortized cost
c. Financial assets at fair value through other comprehensive income
d. Carrying amount
e. Fair value

   
  Classification
EUR thousand a. b. c. d. e.
Equity instruments 421 421 421
Trade receivables 56,271 56,271 56,271
Interest and other financial receivables 310 310 310
Cash and cash equivalents 115,964 115,964 115,964
Total 30.6.2021 172,545 421 172,966 172,966

 

   
EUR thousand a. b. c. d. e.  
Equity instruments 347 421 768 768  
Loan receivables 3,476 3,978 7,454 7,454  
Trade receivables 51,128 51,128 51,128  
Derivative receivables 61 61 61  
Interest and other financial receivables 378 378 378  
Cash and cash equivalents 57,877 57,877 57,877  
Total 31.12.2020 3,885 113,360 421 117,666 117,666  

Principles in estimating fair value of financial assets for 2021 are the same as those used for preparing the consolidated financial statements for 2020.

FINANCIAL LIABILITIES

  30.6.2021 31.12.2020
EUR thousand Carrying amount Fair value Nominal value Carrying amount Fair value Nominal value
Non-current financial liabilities            
             
Debentures 132,560 137,067 135,000 82,862 87,661 85,000
Lease liabilities 14,040 14,040 14,040 14,892 14,892 14,892
Total non-current financial liabilities 146,601 151,107 149,040 97,754 102,553 99,892
             
Current financial liabilities            
             
Lease liabilities 2,628 2,628 2,628 2,539 2,539 2,539
Interest accruals 1,612 1,612 1,612 522 522 522
Derivative liabilities 48 48 48 1 1 1
Other current liabilities 502 502 502 552 552 552
Trade payables 54,362 54,362 54,362 42,024 42,024 42,024
Total current financial liabilities 59,152 59,152 59,152 45,639 45,639 45,639
             
Total 205,753 210,259 208,192 143,393 148,191 145,531


Principles in estimating fair value for financial liabilities for 2021 are the same as those used for preparing the consolidated financial statements for 2020.

FAIR VALUE MEASUREMENT HIERARCHY

EUR thousands Level 1 Level 2 Level 3
Financial assets and liabilities at fair value      
Equity instruments 421
Total 421
       
Derivatives at fairvalue      
Currency forward contracts, liabilities -48
Total -48

Principles in estimating fair value of financial assets and their hierarchies for 2021 are the same as those used for preparing the consolidated financial statements for 2020.

There were no transfers in the fair value measurement hierarchy levels during the reporting period.   

SUOMINEN CORPORATION
Board of Directors


For additional information, please contact:
Petri Helsky, President & CEO, tel. +358 (0)10 214 3080
Toni Tamminen, CFO, tel. +358 (0)10 214 3051

Suominen manufactures nonwovens as roll goods for wipes and other applications. Our vision is to be the frontrunner for nonwovens innovation and sustainability. The end products made of Suominen’s nonwovens are present in people’s daily life worldwide. Suominen’s net sales in 2020 were EUR 458.9 million and we have nearly 700 professionals working in Europe and in the Americas. Suominen’s shares are listed on Nasdaq Helsinki. Read more at www.suominen.fi.


Distribution:
Nasdaq Helsinki
Main media
www.suominen.fi

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