Suominen Corporation Interim Report 17 July 2013 at 9:00am (EEST)
Suominen Corporation's Interim Report for January 1 - June 30, 2013: Net sales from continuing operations continued to grow, operating profit excluding non-recurring items doubled
Highlights in April - June 2013:
-Net sales from the continuing operations grew by 5% and amounted to EUR 107.7 million (102.4)
-Operating profit excluding non-recurring items from the continuing operations increased by 103% to EUR 4.3 million (2.1)
-Suominen agreed to divest its Codi Wipes business unit to Value Enhancement Partners investment company. The deal was closed on 15 July 2013. In this interim report, Codi Wipes is reported in discontinued operations.
-Suominen revises its previous estimate, announced on 17 June 2013, on the net sales development. The company expects its net sales of the continuing operations for the full year 2013 to remain at or slightly exceed the level of 2012. Previously, Suominen estimated that its net sales of the continuing operations for the full year 2013 would remain at the level of 2012. Operating profit excluding non-recurring items is expected to improve from year 2012.
Nina Kopola, President and CEO, commenting on Suominen’s second quarter:
“In the European markets, consumers’ confidence in their personal financial situation continued to improve slightly according to the euro-area consumer confidence index. North America, Suominen’s other main market, saw a more marked rise in the consumer confidence index. However, the development prospects of the general economic situation are still uncertain, especially in Europe.
Suominen’s business operations continued to develop positively in the second quarter. Net sales from the Group’s continuing operations increased to EUR 107.7 million and operating profit, excluding non-recurring items, more than doubled to EUR 4.3 million.
We decided to divest our wet wipes business unit, Codi Wipes, to Value Enhancement Partners investment company. The deal clarifies our position as a leading manufacturer of nonwovens in the wipes value chain, and we can now concentrate even more intensively on further strengthening this position as part of our ‘In the Lead’ strategy. The transaction was closed in July after the end of the reporting period.
We also continued to implement our strategy steadfastly through several other measures, which will increase the share of products with higher added value in our portfolio. In April, we launched two new nonwoven products for higher value-added industrial and household wiping applications. In June, we decided to invest approximately EUR 2.5 million in capacity expansion at the Windsor Locks plant in the USA. The production line that will be renewed is focused on manufacturing Hydraspun® Dispersible nonwovens. The product is flushable as defined in the guidelines issued by the industry associations, European Disposables and Nonwovens Association (EDANA) and The Association of the Nonwoven Fabrics Industry (INDA). With this investment, we will be even better able to respond to the increasing demand for these technically advanced nonwoven materials.
During the reporting period, progress was also made in the strategic development programs launched in our Nonwovens business in the first quarter. The goals of these programs are to harmonize and enhance processes in our supply chain and to improve product development further, which will enable us to accelerate our customers’ operations and increase the share of products with higher added value in our portfolio, in keeping with our strategy.
Net sales from the Wiping segment’s continuing operations grew to EUR 93.1 million (89.4). The segment’s operating profit, excluding non-recurring items, improved from EUR 3.6 million in the corresponding period to EUR 5.8 million in the reporting period. The operating margin continued to increase and was 6.2%.
In the Flexibles segment, the implementation of the extensive business turnaround program initiated at the turn of the year continued. Despite a tight competitive situation, the segment’s net sales grew by 14% to EUR 14.6 million. The segment’s operating profit, excluding non-recurring items, improved on the corresponding period, but was still negative.”