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Suominen Corporation’s Half-Year Financial Report for January 1 - June 30, 2017: Net sales grew, cash flow from operations remained good, operating profit decreased

 

KEY FIGURES

4-6/

4-6/

1-6/

1-6/

1-12/

 

2017

2016

2017

2016

2016

Net sales, EUR million

112.0

108.8

224.9

212.7

416.9

Comparable operating profit, EUR million

4.4

8.7

10.6

14.2

25.6

Operating profit, EUR million

4.4

8.7

10.6

14.2

25.6

Profit for the period, EUR million

2.1

5.2

6.4

8.7

15.2

Earnings per share, basic, EUR

0.04

0.10

0.12

0.16

0.29

Earnings per share, diluted, EUR

0.04

0.09

0.11

0.15

0.26

Cash flow from operations per share, EUR

0.19

0.15

0.31

0.33

0.56

Return on invested capital, rolling 12 months, %

9.7

13.5

11.6

Gearing, %

53.7

24.5

39.6


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

Highlights in April–June 2017:

- Net sales increased by 3% to EUR 112.0 million (108.8).
- Operating profit decreased by 49% to EUR 4.4 million (8.7).
- Cash flow from operations improved to EUR 10.2 million (7.6).
- The new production line at the Bethune plant in SC, USA was started up and the first invoiced products were delivered. However, the start-up progress has been slower than anticipated and Suominen estimates the new line to generate less sales in 2017 than it had previously forecasted.

-  Suominen repeats its revised estimate, disclosed on 20 July 2017, and expects that for the full year 2017, its net sales will improve from year 2016 but its comparable operating profit will fall short of the 2016 level. In 2016, Suominen’s net sales amounted to EUR 416.9 million and comparable operating profit to EUR 25.6 million. The calculation of comparable operating profit is explained in the consolidated financial statements of 2016.

Nina Kopola, President & CEO, comments on Suominen’s second quarter of 2017:

“In the second quarter of 2017, the consumer confidence remained strong in our main market regions, Europe and North America. Consumers’ optimism was also reflected in the demand of Suominen’s products.

Suominen’s net sales grew by 3% to EUR 112.0 million. As our key target during this strategy period is growth, I was pleased with the healthy growth in our sales volumes. Sales value did not develop as positively as volumes, and the unfavorable change in the product mix offset the impact of volume growth. A very fierce competitive situation, especially in nonwovens for baby wipes and flushables, led to lower sales prices.

The largest project in our growth investment program, a new wetlaid line in the Bethune plant in SC, USA, was started up during the quarter, as we estimated in our interim report for Q1. The market interest towards the new line has been significant. The first invoiced products have been delivered to customers. However, the start-up progress has been technically more challenging than we anticipated and some final testing still remains to be done. Therefore we estimate – as we disclosed on 20 July 2017 – that the new line will generate less sales in 2017 than we had previously forecasted. Moreover, lower-than-forecasted net sales combined with the line’s cost level that reflects normal operational status will have a negative impact on the company’s operating profit in 2017.

In addition to the Bethune investment, we have taken other major measures to ensure growth in line with our strategy. We have strengthened our Technology team and are implementing a significant renewal of our ICT systems. These measures, together with the lower sales prices, burdened our profitability in the second quarter. Our operating profit decreased to EUR 4.4 million.

Cash flow from operations improved from the corresponding period to EUR 10.2 million, thanks to the freed working capital.

Once the new manufacturing line in Bethune is fully operational, we will significantly increase our capacity to supply high added value nonwovens products especially for the growing home and workplace wiping markets, supporting a favorable development of our product mix in the future. The completion of the Bethune investment will also close the investment program planned for 2015–2017.

During the second quarter, we continued to launch new high added value products to the market. In April, we introduced a new nonwoven substrate to our Suominen@work offering targeted for professional use. GENESIS® Pro All Purpose is the strongest professional wipes material on the market, outperforming its competitors in key performance areas, such as thickness and absorption capacity. In May, we launched FIBRELLA® Wrap for undercast paddings and cushions used in wound care onto the growing South American market. The earlier growth investment made in production technology in Paulínia, Brazil plant enables Suominen to supply the new product from the plant.

In April, we published a new Changemaker strategy for the next five-year period ending in 2021. If we succeed in its execution, Suominen’s net sales will grow at a rate that doubles the average market growth, making Suominen a company with a net sales over EUR 600 million in 2021.”

Click to open the full Interim Report (pdf)

Contact by email

President & CEO

Nina Kopola +358 10 214 300