Highlights in July–September 2016:
- Net sales decreased by 10% to EUR 103.8 million (114.9).
- Operating profit decreased by 19% to EUR 7.9 million (9.8).
- Cash flow from operations remained strong and was EUR 8.3 million (7.9).
- Return on invested capital and gearing ratio surpassed their target levels.
- Suominen repeats its estimate, disclosed on 20 September 2016, that for the full year 2016 its net sales and comparable operating profit are expected not to reach the level of 2015. In 2015, Suominen’s net sales amounted to EUR 444.0 million and comparable operating profit to EUR 31.2 million. The calculation of comparable operating profit equals to the calculation of previously reported operating profit excluding non-recurring items and is explained in the disclosures of this report.
Nina Kopola, President & CEO, comments on Suominen’s third quarter of 2016:
“The consumer confidence index in the euro zone was more or less on a par with its second-quarter level, but slightly below the level of the corresponding period last year. In the U.S., the consumer confidence index rose somewhat from the second quarter and slightly exceeded the level of the comparison period. Europe and North America are Suominen’s largest market areas.
In the third quarter, deliveries fell short of our expectations, and Suominen’s net sales declined from the comparison period to EUR 103.8 million. The decline in net sales was reflected in the operating profit, which fell to EUR 7.9 million. Thanks to the favorable development of the product portfolio, the gross profit margin remained more or less on the solid level of the comparison period, and the operating profit margin was 7.6%. Owing to, among other things, good capital management, Suominen’s cash flow from operations continued to be very strong, at EUR 8.3 million.
As we communicated on 20 September, 2016, Suominen’s net sales and comparable operating profit will not reach the level of 2015 level in 2016. We have implemented our strategy with determination, but the projects included in the growth investment program and our R&D efforts are creating growth at a slower pace than we had anticipated. The largest of the investment projects, i.e. the construction of a new production line in Bethune, is progressing and the equipment installation work is advancing at high speed. We reiterate our estimate according to which the new production line will begin deliveries to customers in the first quarter of 2017.
Suominen has three financial targets: organic net sales growth, return on invested capital and gearing ratio. We follow up on the latter two targets on a quarterly basis, and net sales growth on an annual level. At the end of September, the return on invested capital exceeded the target level (more than 12%) and was 12.3%. Our gearing was also once again lower than our target range (40–80%), at 28.0%.”
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