Highlights in October – December 2013:
-Net sales from the continuing operations increased by 7% and amounted to EUR 105.2 million (98.1)
-Operating profit excluding non-recurring items from the continuing operations increased by 123% to EUR 3.7 million (1.7)
- The business recovery program of Flexibles business was intensified. The number of employees of the segment decreases by 26 full-time work years. Additionally, Suominen invests EUR 0.5 million in the automatization of the Tampere plant.
- With the current group structure, Suominen expects its group net sales for the full year 2014 to remain at the level of 2013. Operating profit excluding non-recurring items is expected to improve from year 2013. In 2013, Suominen’s net sales were EUR 433.1 million and operating profit excluding non-recurring items was EUR 18.3 million (continuing operations).
- The Board of Directors of Suominen Corporation proposes to the Annual General Meeting that no dividend be paid for the financial year 2013 because the Group profit for the period was negative. .
President & CEO Nina Kopola comments on Suominen’s fourth quarter of 2013:
“In Europe, the increase in the consumer confidence index that held steady for most of 2013 began to level out towards the end of the year. In the United States, following a slight downturn in consumer confidence in the third quarter, the index began to rise as year-end approached, and in December it had reached its highest level in more than five years.
I am very pleased with Suominen’s development, both for the whole year and in the fourth quarter. Our business operations and financial performance have developed quite favorably and in line with our plans. Net sales from Suominen’s continuing operations grew 7% in October–December and totaled EUR 105.2 million. Operating profit, excluding non-recurring items, more than doubled from the comparison period, reaching EUR 3.7 million. Cash flow also developed favorably. In addition, we succeeded in decreasing our interest-bearing net liabilities by EUR 20.5 million since 2012.
In the Wiping segment, net sales from continuing operations increased 6% from the comparison period and were EUR 89.9 million (84.9). The segment’s operating profit, excluding non-recurring items, grew 44% to EUR 3.9 million (2.7), corresponding to 4.4% of net sales.
Despite the tough competitive situation, the Flexibles segment’s net sales grew 15%, totaling EUR 15.3 million (13.4). Flexibles incurred an operating loss of EUR 0.7 million (-0.8). In order to improve the segment’s profitability, a decision was made to step up the business recovery program that was in effect throughout the year. A number of new efficiency-boosting measures were decided on at the end of the year; as a result, there will be a reduction of 26 full-time work years at Suominen’s Tampere plant. In addition, we decided to invest EUR 0.5 million in automatization at the Tampere plant.
We continued with our consistent work to implement our ‘In the Lead’ strategy. As of 1 January 2014, we renewed our Group structure, organization, management system, and operating model. With the changes, our ability to create new business and develop products with increased added value will strengthen. As part of the renewal process, Suominen’s previous Nonwovens business unit was divided into two new business areas effective 1 January 2014: The Convenience business area focuses on serving customers that manufacture wiping products as well as travel and catering nonwovens, while the Care business area is concerned with customers that manufacture health-care and hygiene products. As of 1 January 2014, Convenience and Care business areas will be reported in Nonwovens segment, which is equal to the current Wiping segment.
Strategic development programs involving our nonwovens business progressed as planned in the fourth quarter. The objectives of the programs are to harmonize and boost the efficiency of our delivery chain processes and to accelerate our product development.
After the 2013 financial period ended, we reached an agreement with Ahlstrom on Suominen’s purchase of the Brazilian plant that was part of Ahlstrom’s previous Home and Personal business. The transaction gives Suominen a foothold in the South American markets, which offer exciting new growth opportunities. We will further reinforce our position as the leading manufacturer of nonwovens for wiping products, as once the transaction is concluded, presumably by the end of February, Suominen will be the only company manufacturing nonwovens in Europe, North America and South America. This will enable us to serve our globally operating clientele better than ever before. The transaction is expected to be financed through a convertible hybrid bond, which will be treated as equity. Issuing of the hybrid bond requires the authorization of the Extraordinary General Meeting, which will be held on 31 January 2014.”