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Suominen Corporation’s Interim Report for January 1 - September 30, 2017: Net sales increased, operating profit impacted by investments in growth

Suominen Corporation   Interim Report   27 October 2017 at 8:00 am (EEST)

Suominen Corporation’s Interim Report for January 1 - September 30, 2017: Net sales increased, operating profit impacted by investments in growth

KEY FIGURES

 

7-9/

7-9/

1-9/

1-9/

1-12/

 

2017

2016

2017

2016

2016

Net sales, EUR million

102.4

103.8

327.3

316.5

416.9

Comparable operating profit, EUR million

4.6

7.9

15.3

22.1

25.6

Operating profit, EUR million

4.6

7.9

15.3

22.1

25.6

Profit for the period, EUR million

1.8

4.9

8.2

13.6

15.2

Earnings per share, basic, EUR

0.03

0.09

0.15

0.26

0.29

Earnings per share, diluted, EUR

0.03

0.08

0.14

0.23

0.26

Cash flow from operations per share, EUR

0.04

0.16

0.35

0.50

0.56

Return on invested capital, rolling 12 months, % 

8.3

12.3

11.6

Gearing, %

56.5

28.0

39.6

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

Highlights in July–September 2017:

- Net sales decreased by 1% to EUR 102.4 million (103.8).
- Operating profit decreased by 41% to EUR 4.6 million (7.9).
- Cash flow from operations decreased to EUR 2.3 million (8.3).
- Ramp-up of customer deliveries from the new production line at the Bethune plant in SC, USA continued.
- Suominen issued a new EUR 85 million bond and renewed its bank facilities.

-  Suominen repeats its estimate, disclosed on 9 August 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 third quarter of 2017:

“In the third quarter of 2017, the consumer confidence continued strong both in euro area and in the United States. Europe and North America are our main market regions. Consumers’ optimism was reflected in the demand of nonwoven products.

Suominen’s net sales declined by 1% and amounted to EUR 102.4 million. While the reported net sales decreased, I was pleased with the very nice growth in our sales volumes. The changes in US dollar exchange rate compared to euro decreased net sales by EUR 3.4 million from the comparison period. In addition, the unfavorable change in the product mix somewhat offset the impact of volume growth.
 
The ramp-up process of the new production line in the Bethune plant in SC, USA continued during the third quarter. While we are still experiencing certain technical issues in this ramp-up phase, we are delighted that we are now delivering products to our customers with normal commercial terms. However, as the volumes of the new line are still clearly below expected capacity, the line will continue to impact Suominen’s operating profit in the last quarter of 2017. We expect the new line to contribute positively to Suominen’s gross profit as of the beginning of 2018.

In addition to the Bethune investment, we are also taking other major actions to enable the execution of our strategy. The significant renewal of our ICT systems is ongoing and has progressed as expected. Due to unfavorable net sales and product mix development as well as costs related with the investments, our operating profit decreased from the comparison period.

Cash flow from operations declined from the corresponding period to EUR 2.3 million mainly due to lower profit and as more working capital was tied up.

Thanks to the successfully executed refinancing measures, finalized in the beginning of October and including an issue of a new EUR 85 million bond and renewal of our bank facilities, Suominen continues to have a solid financial position to execute its strategy in coming years.”

Click to open the full Interim Report (pdf).

Contact by email

President & CEO

Nina Kopola +358 10 214 300