Suominen Corporation Interim Report 1 January - 30 September 2007 (IFRS)
SUOMINEN'S SALES IMPROVED CLEARLY -------------------------------------------------------------------------------- | KEY FIGURES | 7-9/2007| 7-9/2006| 1-9/2007| 1-9/2006 | 1-12/2006 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR million | 55.7 | 51.4 | 161.2 | 148.4 | 202.6 | -------------------------------------------------------------------------------- | Operating profit, EUR | 0.5 | 0.3 | 2.2 | 0.4 | 1.2 | | million | | | | | | -------------------------------------------------------------------------------- | Profit/loss for the | -0.3 | -0.4 | -0.4 | -1.7 | -1.8 | | period, EUR million | | | | | | -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.01 | -0.02 | -0.02 | -0.07 | -0.08 | -------------------------------------------------------------------------------- | Return on invested | 1.5 | -2.9 | 2.1 | 0.5 | 0.9 | | capital (ROI), % | | | | | | -------------------------------------------------------------------------------- | Cash flow from | 0.05 | 0.20 | 0.15 | 0.32 | 0.53 | | operations/share, EUR | | | | | | -------------------------------------------------------------------------------- Suominen's net sales and financial performance from January to September improved on the previous year. The outlook for the remainder of the year: Net sales are expected to grow on 2006. Suominen's operating profit is expected to increase on the previous year, and result for the financial year is expected to be positive. GROUP FINANCIAL RESULTS Suominen Corporation's net sales for the third quarter totalled EUR 55.7 million (51.4), up 8 per cent on the figure for the corresponding period in 2006. The volume of sales grew in all units. Operating profit was EUR 0.5 million (0.3), profit before taxes EUR -0.5 million (-0.7) and profit after taxes EUR -0.3 million (-0.4). Net sales for the nine-month period totalled EUR 161.2 million (148.4), an increase of 9 per cent on the previous year. Operating profit was EUR 2.2 million (0.4), profit before taxes EUR -0.6 million (-2.5) and profit after taxes EUR -0.4 million (-1.7). The rise in raw material prices, which has continued all year, accelerated at the end of the period under review, and the delay in transferring the rises in the sales prices had a negative impact on performance. The Wipes and Nonwovens business area did not achieve the targets set for production efficiency during the reporting period. COST SAVING AND OPERATIONAL ENHANCEMENT PROGRAMME Suominen's ‘Stairs to Top' enhancement programme is to develop operations and improve efficiency on a continuous basis, and to increase sales. The impact of its cost saving and enhancement measures yielded some EUR +3 million during the period under review. The programme proceeded as planned in terms of cost savings, but the improvement of efficiency progressed more slowly than planned during the period under review. FINANCING Interest-bearing liabilities totalled EUR 97.3 million, i.e. EUR 7.9 million more than at the beginning of the year. Liabilities include capital loans of EUR 2 million. Net financial expenses were EUR 2.9 million (2.9) or 1.8 per cent (1.9) of net sales. A total of EUR 5.5 million was tied up in working capital in the cash flow statement mainly due to increase in trade receivables. The equity ratio was 30.4 per cent (32.5), and the gearing ratio (ratio of interest-bearing net liabilities to shareholders' equity) was 170.6 per cent (158.2). Cash flow from operations was EUR 0.15 per share (0.32). INVESTMENTS The Company's gross investments in production totalled EUR 9.6 million (2.2). Planned depreciation amounted to EUR 10.4 million (11.0). Wet Wipes accounted for EUR 2.3 million, Nonwovens EUR 1.5 million and Flexible Packaging EUR 5.8 million of total investments. The investments focussed on the extension of Flexible Packaging's production facilities in Poland, and production efficiency and maintenance in all units. SEGMENT RESULTS During the period under review, net sales of the Wipes and Nonwovens business area totalled EUR 103.5 million, an increase of 12 per cent on the corresponding period in 2006. Sales of Nonwovens increased substantially thanks to strong demand, while internal deliveries were reduced. The Wipes and Nonwovens business area recorded an operating profit of EUR 0.4 million (-0.8). Net sales of Wet Wipes totalled EUR 51.3 million. Sales volumes increased, while sales prices fell and net sales remained on the level of 2006. Deliveries to brand owners increased. Sales to retailers decreased on the previous year, and the planned sales volume was not achieved. The production efficiency of the production lines improved on the previous year, but the number of personnel was planned for a higher production volume. Deliveries have increased since the assortment re-launches implemented by customers in late summer. The investment in automation of warehouse handling was completed as planned. The business model of the unit will be revised to make its product range and product concepts even more customer- and consumer-oriented. The aim is to increase sales and improve profitability. Therefore, a Director of New Business Development and Marketing was appointed for the Wipes and Nonwovens business area. The new Director is responsible for steering the development of new business and innovations. Net sales of Nonwovens increased by 19 per cent to EUR 58.4 million thanks to increased sales of hydroentangled material. Deliveries to the US market remained brisk and increased on the previous year, whereas sales to Europe decreased. However, the focus of deliveries is expected to shift back to Europe during the end of the year. Sales of thermally bonded nonwovens remained at the same level as in 2006. Average sales prices rose slightly, but the rise only partly compensated for the increases in raw material prices. The prices of both oil-based raw materials and viscose have been clearly rising during the year. The efficiency of operations has been negatively affected by problems relating to production, and the efficiency-enhancement measures are being implemented at a slower pace than originally planned. The new power plant for process heat has reduced energy costs. The investment project to improve the efficiency of operations and treatment of process waters will be started by the end of the year. The unit's new Production Director started in this position in September. Net sales of Flexible Packaging totalled EUR 58.1 million, an increase of 4 per cent on the previous year. Flexible Packaging generated an operating profit of EUR 2.2 million (1.8). The increase in net sales was due to higher sales volumes. The volume increase was most clearly visible in carrier bags and special products. Growth in hygiene product packaging and food packaging was more moderate. In food packaging, the sales of printed labels for PET bottles increased. The prices for plastic raw materials have risen by nearly one fifth during the nine-month period. Due to the delay in sales price increases, it was possible to transfer only part of the higher raw material costs to the sales prices during the period under review. The new printing machine at the Polish plant started up as planned, and the plant premises are currently being expanded. Sales of flexible packaging in Eastern Europe and Russia increased substantially on the previous year. Efficiency-enhancement measures have focussed on improving the efficiency of printing and converting. The number of personnel at the Swedish plant will be reduced by the end of the year. SHARE CAPITAL AND SHARES Share trading and price The number of Suominen Corporation's shares traded on the OMX Nordic Exchange Helsinki from 1 January to 30 September 2007 was 6,090,526 or 25.7 per cent of the shares included in the Company's share capital. The trading price varied from EUR 2.97 to EUR 3.79. The final trading price was EUR 3.28. The Company's market capitalisation was EUR 77.7 million on 30 September 2007. Share capital The registered number of issued shares of Suominen totals 23,720,112 shares or EUR 11,860,056. There were no changes in share capital during the period under review. The Company's own shares On 1 January 2007, the Company held 51,121 of its own shares, with an acquisition value of EUR 3.19 per share. The Annual General Meeting of Shareholders held on 29 March 2007 authorised the Board of Directors to decide on the acquisition of a maximum of 1,186,000 of the Company's own shares. The authorisation will be valid for 18 months after the decision of the General Meeting. The repurchased shares will be used as payment in business acquisitions or other arrangements in the Company's business, to finance investments, to implement incentive programmes, will be held by the Company, or will be otherwise conveyed or cancelled. The Company's own shares will be repurchased otherwise than in proportion to the holdings of the shareholders by using non-restricted equity through public trading on the Helsinki Stock Exchange at the market price prevailing at the time of acquisition. The General Meeting also authorised the Board of Directors to decide on the conveyance of a maximum of 1,237,000 of the Company's own shares. The authorisation will be valid for 18 months after the end of the General Meeting. Within the authorisation the Company has conveyed 14,778 of its own shares as emoluments to the Board of Directors in the period under review. The price of the conveyed shares was EUR 3.45 per share. During the period under review, the Board of Directors did not exercise its authorities to buy the Company's own shares. On 30 September 2007, Suominen Corporation held a total of 36,343 of its own shares, accounting for 0.0 per cent of the share capital and votes. Stock options 2006 and 2007 Under stock option plan 2006, a maximum of 300,000 stock options shall be issued to the President and CEO of Suominen Corporation as specified by the Board of Directors. Each stock option entitles its holder to subscribe for one Suominen Corporation's share with an equivalent book value of EUR 0.50. The Board of Directors decided to issue 100,000 stock options according to the 2006B stock option plan. The share subscription price for the stock options is the trade volume-weighted average price of the Company share on the Helsinki Stock Exchange in May 2007 or EUR 3.44. The subscription period for the 2006B stock options is from 2 May 2009 to 30 October 2010. Under stock option plan 2007, a maximum of 200,000 stock options shall be issued to the Executive Team of Suominen Corporation as specified by the Board of Directors. Each stock option entitles its holder to subscribe for one Suominen Corporation's share with an equivalent book value of EUR 0.50. The Board of Directors decided to issue 80,000 stock options according to the 2007A stock option plan. The share subscription price for the stock options is the trade volume-weighted average price of the Company share on the Helsinki Stock Exchange in May 2007 or EUR 3.44. The subscription period for the 2007A stock options is from 2 May 2009 to 30 October 2010. As the registered number of Suominen's issued shares totals 23,720,112, the number of shares may rise to a maximum of 24,220,112 after stock option subscriptions. Other authorisation for the board of directors The Board of Directors is not currently authorised to issue shares, convertible bonds or bonds with warrants. Notifications of changes in holdings On 2 May 2007, Sampo Life Insurance Company reported that its holding in the share capital and voting rights of Suominen Corporation had decreased to 3.04 per cent. EVENTS AFTER THE REPORTING PERIOD Pekka Rautala, Vice President and General Manager of the Wet Wipes business unit, resigned and left Suominen after the period under review. His duties will be carried out by the President and CEO of Suominen Corporation until further notice. OUTLOOK Net sales for 2007 are expected to improve on the previous year. Suominen's and particularly Wet Wipes' net sales in the fourth quarter are expected to be higher than those of the previous quarters. The recent sharp rise in raw material prices is expected to have peaked for the time being. Suominen's operating profit is expected to increase on the previous year and result for the financial year is expected to be positive. The estimate on sales growth is based on forecasts given by customers and on our own forecasts. Factors improving Suominen's profitability include cost saving and operational enhancement programmes as well as growth in sales, whereas increases in raw material prices will weaken profitability. Expanding operations in Poland, in particular, is expected to increase investments to a level of EUR 12 million in 2007. NEAR-FUTURE UNCERTAINTIES Uncertainties affecting Suominen's business are described in the report by the Board of Directors for 2006. The estimate on the development of Suominen's net sales is partly based on forecasts and delivery plans received from customers. Changes in the forecasts and plans due to changes in the market situation or customers' stocks may result in net sales that differ from the forecasted amount. Rapid fluctuations in raw material prices may affect Suominen's margins. Uncertainty relating to prices has increased not only in oil-based raw materials but also in other raw materials. The sensitivity of Suominen's goodwill to changes in the business environment is described in the notes to the financial statements for 2006. The annual testing of goodwill according to IAS 36 standard will be based on the strategy and budget, and it will be done by the end of the year. Indications of potential impairment could arise before that if long-term interest rates rise or if there are unfavourable changes in the sales volumes of Wet Wipes. SUOMINEN CORPORATION CONSOLIDATED 1 JANUARY - 30 SEPTEMBER 2007 (IFRS) This interim report has been prepared in compliance with IAS 34 Interim Financial Reporting. Principles for preparing the interim report are the same as those used for preparing the financial statements for 2006, and this interim report should be read parallel to the financial statements for 2006. Amendments to and interpretations of published accounting standards and new accounting standards that came into effect on 1 January 2007 are presented in the financial statements for 2006. Suominen has adopted the IFRS 7 Financial Instruments: Disclosures standard, which came into effect on 1 January 2007, and the amendments to IAS 1 relating to it. The Company also complies with the interpretation of IFRIC 10 Interim Financial Reporting and Impairment, which prohibits, for example, the reversal of impairment losses recognised for goodwill during previous interim periods. In its principles for preparing the financial statements, Suominen has not applied any changes allowed by the published new standards and interpretations prior to their official introduction. The most important reform known concerns segment reporting; the standard on which is expected to enter into force on 1 January 2009. The figures in this interim report have not been audited. STATEMENT OF INCOME -------------------------------------------------------------------------------- | EUR 1 000 | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2007 | 2006 | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | NET SALES | 55 701 | 51 441 | 161 173 | 148 399 | 202 627 | -------------------------------------------------------------------------------- | Cost of goods sold | -52 541 | -48 368 |-150 891 | -139 323 | -189 522 | | | | | | | | -------------------------------------------------------------------------------- | GROSS PROFIT | 3 160 | 3 073 | 10 282 | 9 076 | 13 105 | -------------------------------------------------------------------------------- | Other operating income | 234 | 71 | 1 054 | 428 | 724 | -------------------------------------------------------------------------------- | Sales and marketing | -913 | -847 | -2 925 | -2 674 | -3 567 | | expenses | | | | | | -------------------------------------------------------------------------------- | Research and development | -487 | -446 | -1 443 | -1 472 | -2 009 | -------------------------------------------------------------------------------- | Administration expenses | -1 473 | -1 527 | -4 613 | -4 709 | -6 292 | -------------------------------------------------------------------------------- | Other operating expenses | 24 | -7 | -106 | -240 | -771 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 545 | 317 | 2 249 | 409 | 1 190 | -------------------------------------------------------------------------------- | Interest and other | -1 047 | -979 | -2 891 | -2 943 | -4 024 | | financial income and | | | | | | | expenses | | | | | | -------------------------------------------------------------------------------- | Fair value gains and | 1 | 10 | 9 | 81 | 97 | | losses | | | | | | -------------------------------------------------------------------------------- | PROFIT BEFORE INCOME | -501 | -652 | -633 | -2 453 | -2 737 | | TAXES | | | | | | -------------------------------------------------------------------------------- | Income taxes | 152 | 203 | 185 | 722 | 954 | -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE | -349 | -449 | -448 | -1 731 | -1 783 | | PERIOD | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.01 | -0.02 | -0.02 | -0.07 | -0.08 | -------------------------------------------------------------------------------- KEY FIGURES ON STATEMENT OF INCOME -------------------------------------------------------------------------------- | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2007 | 2006 | 2007 | 2006 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, change, % * | 8.3 | | 8.6 | | | -------------------------------------------------------------------------------- | Gross profit, % ** | 5.7 | 6.0 | 6.4 | 6.1 | 6.5 | -------------------------------------------------------------------------------- | Operating profit, % ** | 1.0 | 0.6 | 1.4 | 0.3 | 0.6 | -------------------------------------------------------------------------------- | Financial income and | -1.9 | -1.9 | -1.8 | -1.9 | -1.9 | | expenses, % ** | | | | | | -------------------------------------------------------------------------------- | Profit before income | -0.9 | -1.3 | -0.4 | -1.7 | -1.4 | | taxes, % ** | | | | | | -------------------------------------------------------------------------------- | Profit for the period, % | -0.6 | -0.9 | -0.3 | -1.2 | -0.9 | | ** | | | | | | -------------------------------------------------------------------------------- * Compared with the corresponding period of the previous year. ** As of net sales. BALANCE SHEET -------------------------------------------------------------------------------- | EUR 1 000 | 9/2007 | 9/2006 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Goodwill | 34 034 | 34 195 | 34 195 | -------------------------------------------------------------------------------- | Intangible non-current assets | 864 | 942 | 944 | -------------------------------------------------------------------------------- | Tangible non-current assets | 75 617 | 78 291 | 77 168 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 716 | 878 | 766 | -------------------------------------------------------------------------------- | Held-to-maturity investments | 100 | 100 | 100 | -------------------------------------------------------------------------------- | Deferred tax assets | 880 | 1 128 | 882 | -------------------------------------------------------------------------------- | Non-current assets, total | 112 211 | 115 534 | 114 055 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 29 327 | 27 285 | 27 840 | -------------------------------------------------------------------------------- | Trade receivables | 27 365 | 26 889 | 25 583 | -------------------------------------------------------------------------------- | Other current receivables | 9 899 | 7 517 | 6 240 | -------------------------------------------------------------------------------- | Income tax receivables | 1 511 | | 918 | -------------------------------------------------------------------------------- | Cash at bank and in hand | 1 664 | 834 | 1 220 | -------------------------------------------------------------------------------- | Current assets, total | 69 766 | 62 525 | 61 801 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets, total | 181 977 | 178 059 | 175 856 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity | | | | -------------------------------------------------------------------------------- | Share capital | 11 860 | 11 860 | 11 860 | -------------------------------------------------------------------------------- | Share premium account | 24 681 | 24 681 | 24 681 | -------------------------------------------------------------------------------- | Fair value and other reserves | 1 455 | 2 164 | 1 185 | -------------------------------------------------------------------------------- | Translation differences | 758 | 609 | 738 | -------------------------------------------------------------------------------- | Other shareholders' equity | 16 487 | 18 533 | 18 279 | -------------------------------------------------------------------------------- | Shareholders' equity, total | 55 241 | 57 847 | 56 743 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 5 977 | 7 417 | 6 768 | -------------------------------------------------------------------------------- | Pension liabilities | 235 | 100 | 314 | -------------------------------------------------------------------------------- | Provisions | 85 | 200 | 85 | -------------------------------------------------------------------------------- | Capital loans | | 2 000 | 2 000 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 64 561 | 70 222 | 63 133 | -------------------------------------------------------------------------------- | Other non-current liabilities | 12 | 31 | 13 | -------------------------------------------------------------------------------- | Non-current liabilities, total | 70 870 | 79 970 | 72 313 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 30 716 | 18 698 | 22 202 | -------------------------------------------------------------------------------- | Provisions | 115 | 200 | 115 | -------------------------------------------------------------------------------- | Capital loans | 2 000 | 2 000 | 2 000 | -------------------------------------------------------------------------------- | Income tax liabilities | 1 333 | 386 | 67 | -------------------------------------------------------------------------------- | Trade payables and other current | 21 702 | 18 958 | 22 416 | | liabilities | | | | -------------------------------------------------------------------------------- | Current liabilities, total | 55 866 | 40 242 | 46 800 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities, total | 126 736 | 120 212 | 119 113 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and liabilities, | 181 977 | 178 059 | 175 856 | | total | | | | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2007 | 1-9/2006 | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Foreign currency translation difference | 28 | -150 | 240 | | for foreign operations | | | | -------------------------------------------------------------------------------- | Cash flow hedges | | | | -------------------------------------------------------------------------------- | Hedge result deferred in equity | 681 | 1 525 | 2 301 | -------------------------------------------------------------------------------- | Transferred from equity to statement of | -384 | | -1 080 | | income | | 802 | | -------------------------------------------------------------------------------- | Defined benefit plan actuarial gains | -65 | -55 | -99 | | (losses) | | | | -------------------------------------------------------------------------------- | Income tax on income and expense | -65 | -590 | -547 | | recognised directly in equity | | | | -------------------------------------------------------------------------------- | Income and expense recognised directly | 195 | 1 532 | 815 | | in equity | | | | -------------------------------------------------------------------------------- | Profit for the period | -448 | -1 731 | -1 783 | -------------------------------------------------------------------------------- | Total recognised income and expense for | -253 | -199 | -968 | | the period | | | | -------------------------------------------------------------------------------- According to IAS 1.96 standard the income and expense recognised in equity are stated in the consolidated statement of income. The above calculation replaces the statement of changes in shareholder's equity. CASH FLOW STATEMENT -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2007 | 1-9/2006 | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operations | | | | -------------------------------------------------------------------------------- | Operating profit | 2 250 | 409 | 1 190 | -------------------------------------------------------------------------------- | Total adjustments | 9 973 | 10 938 | 14 855 | -------------------------------------------------------------------------------- | Cash flow before change in working | 12 223 | 11 347 | 16 045 | | capital | | | | -------------------------------------------------------------------------------- | Change in working capital | -5 503 | 707 | 1 978 | -------------------------------------------------------------------------------- | Financial items | -2 436 | -3 570 | -4 835 | -------------------------------------------------------------------------------- | Taxes paid | 134 | -643 | -605 | -------------------------------------------------------------------------------- | Cash flow from operations before | 4 418 | 7 841 | 12 583 | | interest-bearing receivables | | | | -------------------------------------------------------------------------------- | Change in interest-bearing receivables | -852 | -212 | -100 | -------------------------------------------------------------------------------- | Cash flow from operations | 3 566 | 7 629 | 12 483 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | | | | -------------------------------------------------------------------------------- | Investments in tangible and intangible | -11 026 | -2 394 | -3 135 | | assets | | | | -------------------------------------------------------------------------------- | Proceeds from disposal of fixed assets | 1 396 | 699 | 666 | | and other proceeds | | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | -9 630 | -1 695 | -2 469 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financing | | | | -------------------------------------------------------------------------------- | Repurchase of own shares | | | -157 | -------------------------------------------------------------------------------- | Non-current loans drawn | 7 447 | 5 000 | 5 000 | -------------------------------------------------------------------------------- | Repayments of non-current loans | -1 353 | -3 703 | -10 792 | -------------------------------------------------------------------------------- | Capital loans | -2 000 | -2 000 | -2 000 | -------------------------------------------------------------------------------- | Dividends paid | -1 418 | | | -------------------------------------------------------------------------------- | Change in current loans | 3 847 | -5 519 | -2 015 | -------------------------------------------------------------------------------- | Cash flow from financing | 6 523 | -6 222 | -9 964 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | 459 | -288 | 51 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | 9/2007 | 9/2006 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.02 | -0.07 | -0.08 | -------------------------------------------------------------------------------- | Equity/share, EUR | 2.33 | 2.44 | 2.40 | -------------------------------------------------------------------------------- | Cash flow from operations/share, EUR | 0.15 | 0.32 | 0.53 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | -1.1 | -4.0 | -3.1 | -------------------------------------------------------------------------------- | Return on invested capital (ROI), % | 2.1 | 0.5 | 0.9 | -------------------------------------------------------------------------------- | Equity ratio, % | 30.4 | 32.5 | 32.3 | -------------------------------------------------------------------------------- | Gearing, % | 170.6 | 158.2 | 154.4 | -------------------------------------------------------------------------------- | Gross investments, EUR 1 000 | 9 622 | 2 193 | 4 337 | -------------------------------------------------------------------------------- | Depreciation and impairment losses, EUR | 10 416 | 10 991 | 14 694 | | 1 000 | | | | -------------------------------------------------------------------------------- SEGMENT REPORTING WIPES AND NONWOVENS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2007 | 1-9/2006 | Change % | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | - Wet Wipes | 51 256 | 51 412 | -0.3 | 69 299 | -------------------------------------------------------------------------------- | - Nonwovens | 58 390 | 49 234 | 18.6 | 67 296 | -------------------------------------------------------------------------------- | - eliminations | -6 134 | -7 849 | | -9 687 | -------------------------------------------------------------------------------- | Total | 103 512 | 92 797 | 11.5 | 126 908 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 425 | -841 | | -149 | -------------------------------------------------------------------------------- | % of net sales | 0.4 | -0.9 | | -0.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 117 306 | 116 438 | | 116 435 | -------------------------------------------------------------------------------- | Liabilities | 14 262 | 11 270 | | 13 943 | -------------------------------------------------------------------------------- | Net assets | 103 044 | 105 168 | | 102 492 | -------------------------------------------------------------------------------- | Investments | 3 797 | 1 080 | | 2 150 | -------------------------------------------------------------------------------- | Depreciation and impairment | 6 282 | 6 598 | | 8 768 | | losses | | | | | -------------------------------------------------------------------------------- | Average personnel | 470 | 453 | | 455 | -------------------------------------------------------------------------------- FLEXIBLE PACKAGING -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2007 | 1-9/2006 | Change % | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 58 106 | 55 855 | 4.0 | 75 987 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 2 173 | 1 828 | 18.9 | 1 958 | -------------------------------------------------------------------------------- | % of net sales | 3.7 | 3.3 | | 2.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 58 813 | 55 392 | | 55 127 | -------------------------------------------------------------------------------- | Liabilities | 8 394 | 7 689 | | 8 313 | -------------------------------------------------------------------------------- | Net assets | 50 419 | 47 703 | | 46 814 | -------------------------------------------------------------------------------- | Investments | 5 791 | 1 049 | | 2 122 | -------------------------------------------------------------------------------- | Depreciation and impairment | 4 099 | 4 352 | | 5 873 | | losses | | | | | -------------------------------------------------------------------------------- | Average personnel | 597 | 599 | | 593 | -------------------------------------------------------------------------------- CONSOLIDATION ITEMS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2007 | 1-9/2006 | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | -445 | -253 | -268 | -------------------------------------------------------------------------------- | Operating profit | -349 | -578 | -619 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 5 858 | 6 229 | 4 294 | -------------------------------------------------------------------------------- | Liabilities | 104 080 | 101 253 | 96 857 | -------------------------------------------------------------------------------- | Investments | 34 | 64 | 65 | -------------------------------------------------------------------------------- | Depreciation and impairment losses | 35 | 41 | 53 | -------------------------------------------------------------------------------- | Average personnel | 11 | 10 | 10 | -------------------------------------------------------------------------------- NET SALES BY MARKET AREA -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2007 | 1-9/2006 | 1-12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 25 257 | 24 542 | 33 208 | -------------------------------------------------------------------------------- | Scandinavia | 16 559 | 15 781 | 21 539 | -------------------------------------------------------------------------------- | The Netherlands | 14 111 | 17 045 | 40 348 | -------------------------------------------------------------------------------- | Other Europe | 74 989 | 73 457 | 82 421 | -------------------------------------------------------------------------------- | Other Countries | 30 257 | 17 574 | 25 111 | -------------------------------------------------------------------------------- | Net sales, total | 161 173 | 148 399 | 202 627 | -------------------------------------------------------------------------------- QUARTERLY FIGURES -------------------------------------------------------------------------------- | EUR 1 000 | IV/2006 | I/2007 | II/2007 | III/2007 | IV/2006- | | | | | | | III/2007 | -------------------------------------------------------------------------------- | NET SALES | | | | | | -------------------------------------------------------------------------------- | Wipes and Nonwovens | | | | | | -------------------------------------------------------------------------------- | - Wet Wipes | 17 887 | 17 997 | 15 485 | 17 774 | 69 143 | -------------------------------------------------------------------------------- | - Nonwovens | 18 062 | 17 901 | 19 119 | 21 370 | 76 452 | -------------------------------------------------------------------------------- | - eliminations | -1 838 | -1 354 | -2 137 | -2 643 | -7 972 | -------------------------------------------------------------------------------- | Total | 34 111 | 34 544 | 32 467 | 36 501 | 137 623 | -------------------------------------------------------------------------------- | Flexible Packaging | 20 132 | 19 865 | 18 833 | 19 408 | 78 238 | -------------------------------------------------------------------------------- | Consolidation items | -15 | -110 | -127 | -208 | -460 | | and eliminations | | | | | | -------------------------------------------------------------------------------- | Net sales, total | 54 228 | 54 299 | 51 173 | 55 701 | 215 401 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT | | | | | | -------------------------------------------------------------------------------- | Wipes and Nonwovens | 692 | 587 | -721 | 559 | 1 117 | -------------------------------------------------------------------------------- | % of net sales | 2.0 | 1.7 | -2.2 | 1.5 | 0.8 | -------------------------------------------------------------------------------- | Flexible Packaging | 130 | 952 | 1 169 | 52 | 2 303 | -------------------------------------------------------------------------------- | % of net sales | 0.6 | 4.8 | 6.2 | 0.3 | 2.9 | -------------------------------------------------------------------------------- | Consolidation items | -41 | -289 | 6 | -66 | -390 | | and eliminations | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 781 | 1 250 | 454 | 545 | 3 030 | | total | | | | | | -------------------------------------------------------------------------------- | % of net sales | 1.4 | 2.3 | 0.9 | 1.0 | 1.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET FINANCIAL | -1 065 | -939 | -897 | -1 046 | -3 947 | | EXPENSES | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT BEFORE | -284 | 311 | -443 | -501 | -917 | | INCOME TAXES | | | | | | -------------------------------------------------------------------------------- TAXES FOR THE PERIOD UNDER REVIEW Taxes for the period under review are calculated on the basis of the Group's tax rate for the whole year, which is estimated to be 26 per cent in 2007. Taxes for the corresponding period in 2006 were 29 per cent on loss before taxes due to split of the taxable income between countries. INFORMATION ON RELATED PARTIES Suominen has related party relationships with the members of the Board of Directors, and the President and CEO of the Parent Company and the members of the Corporate Executive Team. The Company has no investments in associated companies. Salaries paid to the related parties amounted to EUR 684 thousand. MOVEMENTS IN BORROWINGS -------------------------------------------------------------------------------- | 1 000 e | 1-9/2007 | 1-9/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 1 January | 89 335 | 99 142 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current loans from financial institutions on 1 | 8 000 | | | January | | | -------------------------------------------------------------------------------- | Change in current loans from financial institutions | -8 000 | | -------------------------------------------------------------------------------- | Current loans from financial institutions on 30 | 0 | | | September | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commercial papers on 1 January | 5 402 | 15 417 | -------------------------------------------------------------------------------- | Change in commercial papers | 11 847 | -5 519 | -------------------------------------------------------------------------------- | Commercial papers on 30 September | 17 249 | 9 898 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current loans on 1 January | 71 933 | 77 725 | -------------------------------------------------------------------------------- | Change in non-current loans | 6 095 | 1 297 | -------------------------------------------------------------------------------- | Non-current loans on 30 September | 78 028 | 79 022 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital loans on 1 January | 4 000 | 6 000 | -------------------------------------------------------------------------------- | Change in capital loans | -2 000 | -2 000 | -------------------------------------------------------------------------------- | Capital loans on 30 September | 2 000 | 4 000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 30 September | 97 277 | 92 920 | -------------------------------------------------------------------------------- CHANGES IN FIXED ASSETS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/ | | 1-9/ | | 1-12/ | | | | 2007 | | 2006 | | 2006 | | | | | | | | | | -------------------------------------------------------------------------------- | | Tangible| Intan- | Tangible| Intan- | Tangible | Intan- | | | | gible | | gible | | gible | -------------------------------------------------------------------------------- | Book value at | 77 168 | 944 | 88 129 | 1 022 | 88 129 | 1 022 | | the beginning of | | | | | | | | the period | | | | | | | -------------------------------------------------------------------------------- | Investments | 9 554 | 68 | 2 028 | 65 | 4 108 | 129 | -------------------------------------------------------------------------------- | Decreases | -917 | -177 | -687 | | -672 | | -------------------------------------------------------------------------------- | Depreciation and | -10 264 | -152 | -10 844 | -147 | -14 505 | -189 | | impairments | | | | | | | -------------------------------------------------------------------------------- | Translation | 76 | 181 | -335 | 2 | 108 | -18 | | differences and | | | | | | | | other changes | | | | | | | -------------------------------------------------------------------------------- | Book value at | 75 617 | 864 | 78 291 | 942 | 77 168 | 944 | | the end of the | | | | | | | | period | | | | | | | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR 1 000 | 9/2007 | 9/2006 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FOR OWN DEBT | | | | -------------------------------------------------------------------------------- | Real estate mortgages | 5 046 | | 5 046 | -------------------------------------------------------------------------------- | Corporate mortgages | 1 177 | 1 177 | 1 177 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OTHER OWN COMMITMENTS | | | | -------------------------------------------------------------------------------- | Leasing payments and commitments | 8 140 | 8 497 | 8 555 | -------------------------------------------------------------------------------- | Rent commitments | 14 074 | 11 498 | 15 767 | -------------------------------------------------------------------------------- | Guarantee commitment for financial | 1 579 | 1 662 | 1 642 | | lease of discontinued operations | | | | -------------------------------------------------------------------------------- NOMINAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS -------------------------------------------------------------------------------- | EUR 1 000 | 9/2007 | 9/2006 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENCY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 10 428 | 10 824 | 9 750 | -------------------------------------------------------------------------------- | Fair value | -38 | -10 | -5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INTEREST RATE DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 66 333 | 67 300 | 60 633 | -------------------------------------------------------------------------------- | Fair value | 1 122 | 681 | 1 075 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ELECTRICITY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 5 445 | 6 297 | 5 638 | -------------------------------------------------------------------------------- | Fair value | 1 007 | 2 452 | 791 | -------------------------------------------------------------------------------- Helsinki, 24 October 2007 SUOMINEN CORPORATION Board of Directors Additional information: Mr. Kalle Tanhuanpää, President and CEO, tel. +358 (0)10 214 300.interim-2007-10-24.pdf
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