Suominen Corporation Interim report 1 January - 31 March 2008 (IFRS)
SUOMINEN CORPORATION INTERIM REPORT 23 APRIL 2008 AT 8.45 A.M. INTERIM REPORT 1 JANUARY - 31 MARCH 2008 (IFRS) SUOMINEN'S RESULT NEGATIVE DUE TO HIGH RAW MATERIAL COSTS -------------------------------------------------------------------------------- | KEY FIGURES | 1-3/2008 | 1-3/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR million | 54.5 | 54.3 | 215.2 | -------------------------------------------------------------------------------- | Operating profit before goodwill | -0.1 | 1.3 | 1.7 | | amortisation, EUR million | | | | -------------------------------------------------------------------------------- | Operating profit, EUR million | -0.1 | 1.3 | -6.8 | -------------------------------------------------------------------------------- | Profit/loss for the period, EUR | -0.9 | 0.2 | -10.1 | | million | | | | -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.04 | 0.01 | -0.43 | -------------------------------------------------------------------------------- | Cash flow from operations/share, | 0.14 | -0.05 | 0.12 | | EUR | | | | -------------------------------------------------------------------------------- Outlook: Underlying operating profit is expected to improve on 2007 although no major changes are expected in the level of net sales. The second quarter of the year is anticipated to continue to be challenging. GROUP FINANCIAL RESULTS Suominen Corporation's net sales for the first quarter totalled EUR 54.5 million (54.3). Operating profit was EUR -0.1 million (1.3), profit before taxes EUR -1.2 million (0.3) and profit after taxes EUR -0.9 million (0.2). In the first quarter of 2008, prices for raw materials and especially for viscose continued to rise and were higher than in the first and last quarters of 2007. Increased raw material prices and the price reductions included in some long-term contracts lowered the result by EUR 1.5 million. The implementation of the cost-saving and operational enhancement programmes continued. Cost-saving and operational enhancement programme Suominen´s Stairs to Top programme extending over a number of years under way covers both operational development and continuous improvement, as well an updated customer offering. An improvement of EUR 1.0 million was achieved through these programmes during the period under review. Cost savings included in the programmes continued to proceed well. A total of EUR 0.8 million was released from the working capital. Financing Interest-bearing liabilities totalled EUR 99.5 million, i.e. EUR 0.3 million more than at the beginning of the year. To improve the Group's balance sheet structure, Suominen issued a capital loan of EUR 10.0 million directed to institutional and professional investors in March. In difficult money market, the issue succeeded well. The bond is a five-year capital loan that will be repaid in five equal instalments, the coupon is 11.5 per cent, and according to the Finnish Companies Act other debts take priority over the loan. Net financial expenses were EUR 1.1 million (0.9) or 2.0 per cent (1.7) of net sales. A total of EUR 0.8 million was released in working capital in the cash flow statement. The equity ratio was 26.5 per cent (31.3). When the capital loans are included in shareholders' equity, the equity ratio was 33.6 per cent (33.6) and the ratio of liabilities to shareholders' equity 146.1 per cent (141.6). Cash flow from operations was EUR 0.14 per share (-0.05). Investments The Company's gross investments in production totalled EUR 0.9 million (2.3). Planned depreciation amounted to EUR 3.3 million (3.6). Wet Wipes accounted for EUR 0.2 million (0.8), Nonwovens EUR 0.3 million (0.4) and Flexible Packaging EUR 0.4 million (1.1) of total investments. Investments were replacement and maintenance investments. SEGMENT RESULTS During the period under review, net sales of the Wipes and Nonwovens business area totalled EUR 35.5 million, an increase of 3 per cent on the corresponding period in 2007. The operating profit of Wipes and Nonwovens totalled EUR -0.1 million (0.6 million). Net sales of Wet Wipes totalled EUR 18.5 million, an increase of 3 per cent on the previous year. Delivery volumes grew; strong growth was seen in personal care wipes in particular. Average sales prices fell as expected, mainly due to long-term contracts. The margins were reduced due to increases in raw material prices. The business unit launched a revision of its production recipes, which will enable a shift to less expensive raw materials for some products. The revision, including the necessary audits, will take time and did not yet have any effect during the period under review. The positive development of operational efficiency and the cost-saving measures continued, but the use of automatic lines was lower than planned due to the demand structure for the products. Whether the targets of the Stairs to Top programme set for the unit for 2008 will be achieved will, to a great extent, depend on the progress made in improving the yield of production and increasing the line speeds. The new organisational model, according to which sales and marketing management as well as supply chain management report directly to the head of the business area, was introduced as of the beginning of March. Net sales of Nonwovens increased by 15 per cent to EUR 20.6 million. Net sales and delivery volumes increased over the first quarter of the previous year thanks to clearly higher volumes of thermobonded material for hygiene products. In hydroentangled nonwovens, the focus of sales shifted to Europe. There was a clear increase in internal deliveries. Prices for raw materials and especially for viscose continued to rise, which eroded the business unit's margins and resulted in a lower result than in 2007. Production efficiency improved and was stabilised thanks to fewer production disturbances and a better yield. The stock of finished products was also increased as planned. An employee negotiation procedure that affected 9 people was carried out in the unit, resulting in an equal headcount reduction. Net sales of Flexible Packaging totalled EUR 19.1 million (19.9) and operating profit EUR 0.2 million (1.0). Net sales and sales volumes decreased slightly from the previous year. The decrease was most clearly visible in hygiene packaging, whereas in carrier bags, the decrease was within the range of normal demand fluctuations. Sales development of wrap-around labels and security and system packaging remained positive. Raw material prices were higher than in the corresponding period in 2007 and also exceeded the prices of the last quarter of 2007. The price development of raw materials was the main reason for the lower result. Production at the Polish plant increased by 15 per cent thanks to the investment in the printing machine made in 2007. The stock of finished products was increased in anticipation of a growing demand for food packaging and carrier bags. Employee negotiations affecting some 50 people were started in the business area. The aim is to secure the competitiveness of the Finnish plants. The negotiations were concluded in April. CHANGES IN GROUP ORGANISATION AND MANAGEMENT Mr. Paul-Erik Toivo was appointed head of Suominen Wipes and Nonwovens business area on 17 March 2008. Mr. Petri Rolig was appointed President and CEO of the Company as of 1 May 2008. Mr. Kalle Tanhuanpää will continue as President and CEO until 30 April 2008. The Corporate Executive Team comprises, the President and CEO, and the Vice Presidents and General Managers of the Wipes and Nowovens, and Flexible Packaging businesses, and the Vice President and CFO. ANNUAL GENERAL MEETING OF SHAREHOLDERS Suominen Corporation's Annual General Meeting of Shareholders was held on 27 March 2008. The Meeting decided that no dividend be paid for 2007. The Meeting approved the financial statements of the parent company and the Group for 2007 and released the members of the Board of Directors and the President and CEO from liability for the period. The Meeting elected Heikki Bergholm, Kai Hannus, Pekka Laaksonen, Juhani Lassila, Mikko Maijala and Heikki Mairinoja to the Board of Directors. In its initial meeting, the Board of Directors elected Mikko Maijala as Chairman and Pekka Laaksonen as Deputy Chairman. PricewaterhouseCoopers Oy, Authorised Public Accountants, with Heikki Lassila, APA, as the principal auditor, were elected as auditors of Suominen Corporation. SHARE CAPITAL AND SHARES Share trading and price The number of Suominen Corporation's shares traded on the OMX Nordic Exchange in Helsinki from 1 January to 31 March 2008 was 630,621 shares or 2.7 per cent of the shares included in the Company's share capital. The trading price varied from EUR 1.52 to EUR 2.25. The final trading price was EUR 1.63, giving the Company a market capitalisation of EUR 38.7 million on 31 March 2008. 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 2008, the Company held 36,343 of its own shares, with an acquisition value of EUR 3.19 per share. The Annual General Meeting of Shareholders held on 27 March 2008 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 OMX Nordic Exchange in Helsinki 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 1,222,000 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 31,286 of its own shares as emoluments to the Board of Directors in the period under review. The price of the conveyed shares was EUR 1.63 per share. During the period under review, the Board of Directors did not exercise its authorities to buy the Company's own shares. On 31 March 2008, Suominen Corporation held a total of 5,057 of its own shares, accounting for 0.0 per cent of the share capital and votes. Stock options 2007 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. According to the 2007A stock option plan a total of 35,000 stock options has been issued in the period under review. The share subscription price for the stock options is the trade volume-weighted average price of the Company share on the OMX Nordic Exchange in Helsinki in May 2007 or EUR 3.44. The subscription period for the 2007A stock options is from 2 May 2009 to 30 October 2010. Suominen has stock option plans 2006 and 2007. 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. OUTLOOK Consumption of the main products produced by Suominen is expected to grow faster than general consumption on the Company's geographical markets. The focus of Suominen's operations in 2008 will be on securing a clear improvement in profitability, strong cash flow and capital structure. Investments already made, together with investments in know-how, will help improve efficiency. The ongoing cost-saving and efficiency-enhancement programme is expected to improve Suominen's competitiveness. The prices of the main raw materials used by Suominen have continued to increase this year, and they are expected to remain high for at least the first part of the year. Also energy prices are expected to remain high. Underlying operating profit is expected to improve on 2007 although no major changes are expected in the level of net sales. The second quarter of the year is anticipated to continue to be challenging. EVENTS AFTER THE REPORTING PERIOD Mr. Kalle Tanhuanpää, the President and CEO of Suominen Corporation will leave the Company to join another company in May 2008. Mr. Petri Rolig has been appointed the Company's new President and CEO as of 1 May 2008. He has been Vice President and General Manager of Suominen Flexible Packaging. Employee negotiations started in March 2008 at Suominen Flexible Packaging's Tampere and Nastola plants have been concluded on 15 April 2008. As a result of the negotiations, pension arrangements, natural redundancy and termination of fixed-term contracts, the total headcount reduction will be 50 persons. NEAR-FUTURE UNCERTAINTIES The estimate concerning the development of Suominen's net sales is based in part on forecasts and action plans provided by the Group's customers. Changes in these forecasts and plans resulting from changes in the market situation or changes in customers' inventory levels could affect Suominen's margins. Nonwovens and Flexible Packaging purchase oil-based raw materials to the value of some EUR 45 million annually. In addition, significantly amounts of viscose, printing inks, and solvents are also purchased. Rapid fluctuations in the world market prices of raw materials can affect Suominen's margins. Suominen's cost-saving and operational enhancement efforts are focused on areas such as improving yield, increasing machine speeds, and reducing changeover time. The benefits of these efforts will be most evident if production volumes will not decline from current levels. Delays in the implementation of measures or their failure would have a negative impact on the Company's result. The sensitivity of Suominen's group goodwill, and possible changes in the general assumptions are described in the notes to the financial statements for 2007. Suominen's business risks are described in the report of the Board of Directors for 2007. SUOMINEN CORPORATION CONSOLIDATED 1 JANUARY - 31 MARCH 2008 (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 2007, and this interim report should be read parallel to the financial statements for 2007. Amendments to and interpretations of published accounting standards and new accounting standards that came into effect on 1 January 2008 are presented in the financial statements for 2007. The Company 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, on which the standard will enter into force on 1 January 2009. The figures in this interim report have not been audited. STATEMENT OF INCOME -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | 54 462 | 54 299 | 215 245 | -------------------------------------------------------------------------------- | Cost of goods sold | -51 723 | -50 252 | -202 738 | -------------------------------------------------------------------------------- | GROSS PROFIT | 2 739 | 4 047 | 12 507 | -------------------------------------------------------------------------------- | Other operating income | 169 | 475 | 1 438 | -------------------------------------------------------------------------------- | Sales and marketing expenses | -838 | -1 045 | -3 643 | -------------------------------------------------------------------------------- | Research and development | -539 | -435 | -2 121 | -------------------------------------------------------------------------------- | Administration expenses | -1 625 | -1 692 | -6 300 | -------------------------------------------------------------------------------- | Other operating expenses | -31 | -100 | -228 | -------------------------------------------------------------------------------- | OPERATING PROFIT BEFORE GOODWILL | -125 | 1 250 | 1 653 | | AMORTISATION | | | | -------------------------------------------------------------------------------- | Goodwill amortisation | | | -8 430 | -------------------------------------------------------------------------------- | OPERATING PROFIT | -125 | 1 250 | -6 777 | -------------------------------------------------------------------------------- | Interest and other financial income and | -1 084 | -945 | -3 922 | | expenses | | | | -------------------------------------------------------------------------------- | Fair value gains and losses | | 6 | 4 | -------------------------------------------------------------------------------- | PROFIT BEFORE INCOME TAXES | -1 209 | 311 | -10 695 | -------------------------------------------------------------------------------- | Income taxes | 309 | -80 | 564 | -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE PERIOD | -900 | 231 | -10 131 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.04 | 0.01 | -0.43 | -------------------------------------------------------------------------------- KEY FIGURES ON STATEMENT OF INCOME -------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, change, % * | 0.3 | | | -------------------------------------------------------------------------------- | Gross profit, % ** | 5.0 | 7.5 | 5.8 | -------------------------------------------------------------------------------- | Operating profit, % ** | -0.2 | 2.3 | -3.1 | -------------------------------------------------------------------------------- | Financial income and expenses, % ** | -2.0 | -1.7 | -1.8 | -------------------------------------------------------------------------------- | Profit before income taxes, % ** | -2.2 | 0.6 | -5.0 | -------------------------------------------------------------------------------- | Profit for the period, % ** | -1.7 | 0.4 | -4.7 | -------------------------------------------------------------------------------- * Compared with the corresponding period of the previous year. ** As of net sales. BALANCE SHEET -------------------------------------------------------------------------------- | EUR 1 000 | 3/2008 | 3/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Goodwill | 25 604 | 34 195 | 25 604 | -------------------------------------------------------------------------------- | Intangible non-current assets | 881 | 945 | 942 | -------------------------------------------------------------------------------- | Tangible non-current assets | 72 049 | 74 861 | 74 083 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 712 | 725 | 712 | -------------------------------------------------------------------------------- | Held-to-maturity investments | 100 | 100 | 100 | -------------------------------------------------------------------------------- | Deferred tax assets | 961 | 888 | 688 | -------------------------------------------------------------------------------- | Non-current assets, total | 100 307 | 111 714 | 102 129 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 33 280 | 29 147 | 30 765 | -------------------------------------------------------------------------------- | Trade receivables | 26 277 | 25 540 | 28 718 | -------------------------------------------------------------------------------- | Other current receivables | 5 169 | 8 163 | 8 873 | -------------------------------------------------------------------------------- | Income tax receivables | 339 | 1 257 | 841 | -------------------------------------------------------------------------------- | Cash at bank and in hand | 3 904 | 282 | 1 094 | -------------------------------------------------------------------------------- | Current assets, total | 68 969 | 64 389 | 70 291 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets, total | 169 276 | 176 103 | 172 420 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 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 | 755 | 955 | 1 661 | -------------------------------------------------------------------------------- | Translation differences | 1 402 | 560 | 1 202 | -------------------------------------------------------------------------------- | Other shareholders' equity | 6 120 | 17 106 | 6 903 | -------------------------------------------------------------------------------- | Shareholders' equity, total | 44 818 | 55 162 | 46 307 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 5 457 | 6 083 | 5 848 | -------------------------------------------------------------------------------- | Pension liabilities | | 290 | | -------------------------------------------------------------------------------- | Provisions | | 85 | | -------------------------------------------------------------------------------- | Capital loans | 10 000 | 2 000 | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 62 336 | 62 817 | 62 186 | -------------------------------------------------------------------------------- | Other non-current liabilities | | 12 | | -------------------------------------------------------------------------------- | Non-current liabilities, total | 77 793 | 71 287 | 68 034 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 25 128 | 25 318 | 34 933 | -------------------------------------------------------------------------------- | Provisions | 100 | 115 | 100 | -------------------------------------------------------------------------------- | Capital loans | 2 000 | 2 000 | 2 000 | -------------------------------------------------------------------------------- | Income tax liabilities | 106 | 697 | | -------------------------------------------------------------------------------- | Trade payables and other current | 19 331 | 21 524 | 21 046 | | liabilities | | | | -------------------------------------------------------------------------------- | Current liabilities, total | 46 665 | 49 654 | 58 079 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities, total | 124 458 | 120 941 | 126 113 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and liabilities, | 169 276 | 176 103 | 172 420 | | total | | | | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY -------------------------------------------------------------------------------- | EUR 1 | Share | Share | Own | Trans | Fair | Actuari | Re-ta | Total | | 000 | capit | premi | shar | -lati | value | al | ined | | | | al | um | es | on | reserve | gains | earn- | | | | | accou | | diffe | s | and | ings | | | | | nt | | -renc | | losses | | | | | | | | es | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | 11 | 24 | -115 | 1 202 | 1 776 | 0 | 6 903 | 46 307 | | equity | 860 | 681 | | | | | | | | at 1 | | | | | | | | | | Jan. | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash | | | | | -1 224 | | | -1 224 | | flow | | | | | | | | | | hedges | | | | | | | | | -------------------------------------------------------------------------------- | Translat | | | | 177 | | | | 177 | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Deferred | | | | 23 | 318 | | | 341 | | taxes | | | | | | | | | -------------------------------------------------------------------------------- | Share-ba | | | | | | | 30 | 30 | | sed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | 87 | 87 | | changes | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | 200 | -906 | | 117 | -589 | | income | | | | | | | | | | recognis | | | | | | | | | | ed | | | | | | | | | | directly | | | | | | | | | | in | | | | | | | | | | equity | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | | | | -900 | -900 | | income | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | 0 | 0 | 0 | 200 | -906 | 0 | -783 | -1 489 | | recognis | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expense | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | 11 | 24 | -115 | 1 402 | 870 | 0 | 6 120 | 44 818 | | equity | 860 | 681 | | | | | | | | at 31 | | | | | | | | | | March | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1 | Share | Share | Own | Trans | Fair | Actuar- | Re-ta | Total | | 000 | capit | premi | shar | -lati | value | ial | ined | | | | al | um | es | on | reserve | gains | earn- | | | | | accou | | diffe | s | and | ings | | | | | nt | | - | | losses | | | | | | | | rence | | | | | | | | | | s | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | 11 | 24 | -163 | 738 | 1 348 | 1 372 | 16 | 56 743 | | equity | 860 | 681 | | | | | 907 | | | at 1 | | | | | | | | | | Jan. | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash | | | | | - 311 | | | -311 | | flow | | | | | | | | | | hedges | | | | | | | | | -------------------------------------------------------------------------------- | Translat | | | | -241 | | | | -241 | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Deferred | | | | 63 | 81 | 7 | | 151 | | taxes | | | | | | | | | -------------------------------------------------------------------------------- | Share-ba | | | | | | | 9 | 9 | | sed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | -22 | | -22 | | changes | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | -178 | -230 | -15 | 9 | -414 | | income | | | | | | | | | | recognis | | | | | | | | | | ed | | | | | | | | | | directly | | | | | | | | | | in | | | | | | | | | | equity | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | | | | 231 | 231 | | income | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | 0 | 0 | 0 | -178 | -230 | -15 | 240 | -183 | | recognis | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expense | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Actuaria | | | | | | | 22 | 22 | | l gains | | | | | | | | | | and | | | | | | | | | | losses/ | | | | | | | | | | changes | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | | | -1 | -1 420 | | | | | | | | | 420 | | -------------------------------------------------------------------------------- | Total | 11 | 24 | -163 | 560 | 1 118 | 1 357 | 15 | 55 162 | | equity | 860 | 681 | | | | | 749 | | | at 31 | | | | | | | | | | March | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- CASH FLOW STATEMENT -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operations | | | | -------------------------------------------------------------------------------- | Operating profit | -125 | 1 250 | -6 777 | -------------------------------------------------------------------------------- | Total adjustments | 3 238 | 3 469 | 21 430 | -------------------------------------------------------------------------------- | Cash flow before change in working | 3 112 | 4 719 | 14 653 | | capital | | | | -------------------------------------------------------------------------------- | Change in working capital | 778 | -1 469 | -7 256 | -------------------------------------------------------------------------------- | Financial items | -441 | -583 | -3 852 | -------------------------------------------------------------------------------- | Taxes paid | -23 | -331 | -791 | -------------------------------------------------------------------------------- | Cash flow from operations before | 3 427 | 2 336 | 2 754 | | interest-bearing receivables | | | | -------------------------------------------------------------------------------- | Change in interest-bearing receivables | | -3 536 | -5 | -------------------------------------------------------------------------------- | Cash flow from operations | 3 427 | -1 200 | 2 749 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | | | | -------------------------------------------------------------------------------- | Investments in tangible and intangible | -956 | -3 421 | -12 898 | | assets | | | | -------------------------------------------------------------------------------- | Proceeds from disposal of fixed assets | | 898 | 1 634 | | and other proceeds | | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | -956 | -2 523 | -11 264 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financing | | | | -------------------------------------------------------------------------------- | Non-current loans drawn | | | 18 371 | -------------------------------------------------------------------------------- | Repayments of non-current loans | -1 400 | -316 | -12 042 | -------------------------------------------------------------------------------- | Capital loans | 10 000 | | -2 000 | -------------------------------------------------------------------------------- | Foreign exchange profit or loss | 167 | | 522 | -------------------------------------------------------------------------------- | Dividends paid | | | -1 420 | -------------------------------------------------------------------------------- | Change in current loans | -8 422 | 3 118 | 4 934 | -------------------------------------------------------------------------------- | Cash flow from financing | 345 | 2 802 | 8 365 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | 2 817 | -922 | -150 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | 1-3/2008 | 1-3/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.04 | 0.01 | -0.43 | -------------------------------------------------------------------------------- | Equity/share, EUR | 1.89 | 2.33 | 1.96 | -------------------------------------------------------------------------------- | Cash flow from operations/share, EUR | 0.14 | -0.05 | 0.12 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | -7.9 | 1.7 | -18.8 | -------------------------------------------------------------------------------- | Return on invested capital (ROI), % | -0.3 | 3.5 | -4.5 | -------------------------------------------------------------------------------- | Equity ratio, % | 26.5 | 31.3 | 26.9 | -------------------------------------------------------------------------------- | Gearing, % | 212.0 | 159.1 | 210.5 | -------------------------------------------------------------------------------- | Gross investments, EUR 1 000 | 912 | 2 283 | 11 266 | -------------------------------------------------------------------------------- | Depreciation and impairment losses, EUR | 3 339 | 3 530 | 13 934 | | 1 000 | | | | -------------------------------------------------------------------------------- | Goodwill amortisation, EUR 1 000 | | | 8 430 | -------------------------------------------------------------------------------- SEGMENT REPORTING WIPES AND NONWOVENS -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | Change % | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | - Wet Wipes | 18 507 | 17 997 | 2.8 | 70 032 | -------------------------------------------------------------------------------- | - Nonwovens | 20 559 | 17 901 | 14.8 | 76 970 | -------------------------------------------------------------------------------- | - eliminations | -3 564 | -1 354 | | -9 413 | -------------------------------------------------------------------------------- | Total | 35 502 | 34 544 | 2.8 | 137 589 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit before | -97 | 587 | -116.5 | -359 | | goodwill amortisation | | | | | -------------------------------------------------------------------------------- | % of net sales | -0.3 | 1.7 | | -0.3 | -------------------------------------------------------------------------------- | Goodwill amortisation | | | | -8 430 | -------------------------------------------------------------------------------- | Operating profit | -97 | 587 | | -8 789 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 106 952 | 117 020 | | 108 295 | -------------------------------------------------------------------------------- | Liabilities | 11 831 | 12 188 | | 12 884 | -------------------------------------------------------------------------------- | Net assets | 95 121 | 104 832 | | 95 411 | -------------------------------------------------------------------------------- | Investments | 558 | 1 140 | | 4 379 | -------------------------------------------------------------------------------- | Depreciation and impairment | 1 925 | 2 152 | | 8 407 | | losses | | | | | -------------------------------------------------------------------------------- | Goodwill amortisation | | | | 8 430 | -------------------------------------------------------------------------------- | Average personnel | 459 | 467 | | 466 | -------------------------------------------------------------------------------- FLEXIBLE PACKAGING -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | Change % | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 19 094 | 19 865 | -3.9 | 78 269 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 175 | 952 | -81.6 | 2 407 | -------------------------------------------------------------------------------- | % of net sales | 0.9 | 4.8 | | 3.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 57 835 | 56 032 | | 59 744 | -------------------------------------------------------------------------------- | Liabilities | 9 423 | 7 870 | | 9 896 | -------------------------------------------------------------------------------- | Net assets | 48 412 | 48 162 | | 49 848 | -------------------------------------------------------------------------------- | Investments | 354 | 1 143 | | 6 852 | -------------------------------------------------------------------------------- | Depreciation and impairment | 1 403 | 1 395 | | 5 481 | | losses | | | | | -------------------------------------------------------------------------------- | Average personnel | 581 | 586 | | 593 | -------------------------------------------------------------------------------- CONSOLIDATION ITEMS -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | -134 | -110 | -613 | -------------------------------------------------------------------------------- | Operating profit | -203 | -289 | -395 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 4 489 | 3 051 | 4 381 | -------------------------------------------------------------------------------- | Liabilities | 103 203 | 99 463 | 103 333 | -------------------------------------------------------------------------------- | Investments | | | 35 | -------------------------------------------------------------------------------- | Depreciation and impairment losses | 11 | 13 | 46 | -------------------------------------------------------------------------------- | Average personnel | 12 | 12 | 11 | -------------------------------------------------------------------------------- NET SALES BY MARKET AREA -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 8 416 | 8 239 | 34 139 | -------------------------------------------------------------------------------- | Scandinavia | 4 789 | 5 747 | 22 032 | -------------------------------------------------------------------------------- | The Netherlands | 4 667 | 4 452 | 19 022 | -------------------------------------------------------------------------------- | Other Europe | 28 888 | 25 963 | 104 539 | -------------------------------------------------------------------------------- | Other countries | 7 702 | 9 898 | 35 513 | -------------------------------------------------------------------------------- | Net sales, total | 54 462 | 54 299 | 215 245 | -------------------------------------------------------------------------------- QUARTERLY FIGURES -------------------------------------------------------------------------------- | EUR 1 000 | II/2007 | III/2007 | IV/2007 | I/2008 | II/2007- | | | | | | | I/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | | | | | | -------------------------------------------------------------------------------- | Wipes and Nonwovens | | | | | | -------------------------------------------------------------------------------- | - Wet Wipes | 15 485 | 17 774 | 18 776 | 18 507 | 70 542 | -------------------------------------------------------------------------------- | - Nonwovens | 19 119 | 21 370 | 18 580 | 20 559 | 79 628 | -------------------------------------------------------------------------------- | - eliminations | -2 137 | -2 643 | -3 280 | -3 564 | -11 624 | -------------------------------------------------------------------------------- | Total | 32 467 | 36 501 | 34 076 | 35 502 | 138 546 | -------------------------------------------------------------------------------- | Flexible Packaging | 18 833 | 19 408 | 20 163 | 19 094 | 77 498 | -------------------------------------------------------------------------------- | Consolidation items | -127 | -208 | -168 | -134 | -637 | | and eliminations | | | | | | -------------------------------------------------------------------------------- | Net sales, total | 51 173 | 55 701 | 54 071 | 54 462 | 215 407 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT | | | | | | -------------------------------------------------------------------------------- | Wipes and Nonwovens | -721 | 559 | -784 | -97 | -1 043 | -------------------------------------------------------------------------------- | % of net sales | -2.2 | 1.5 | -2.3 | -0.3 | -0.8 | -------------------------------------------------------------------------------- | Flexible Packaging | 1 169 | 52 | 234 | 175 | 1 630 | -------------------------------------------------------------------------------- | % of net sales | 6.2 | 0.3 | 1.2 | 0.9 | 2.1 | -------------------------------------------------------------------------------- | Consolidation items | 6 | -66 | -46 | -203 | -309 | | and eliminations | | | | | | -------------------------------------------------------------------------------- | Operating profit | 454 | 545 | -596 | -125 | 278 | | before goodwill | | | | | | | amortisation | | | | | | -------------------------------------------------------------------------------- | % of net sales | 0.9 | 1.0 | -1.1 | -0.2 | 0.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Goodwill | | | -8 430 | | -8 430 | | amortisation | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 454 | 545 | -9 026 | -125 | -8 152 | | total | | | | | | -------------------------------------------------------------------------------- | % of net sales | 0.9 | 1.0 | -16.7 | -0.2 | -3.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET FINANCIAL | -897 | -1 046 | -1 036 | -1 084 | -4 063 | | EXPENSES | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT BEFORE | -443 | -501 | -10 062 | -1 209 | -12 215 | | 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 2008 (26 per cent in 2007). INFORMATION ON RELATED PARTIES Suominen has related party relationships with the members of the Board of Directors, 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 163 thousand, share-based payments EUR 30 thousand, and unsecured loans EUR 1 100 thousand. MOVEMENTS IN BORROWINGS -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/2008 | 1-3/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 1 January | 99 119 | 89 335 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current loans from financial institutions on 1 | 3 000 | 8 000 | | January | | | -------------------------------------------------------------------------------- | Change in current loans from financial institutions | -3 000 | -8 000 | -------------------------------------------------------------------------------- | Current loans from financial institutions on 31 | 0 | 0 | | March | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commercial papers on 1 January | 15 336 | 5 402 | -------------------------------------------------------------------------------- | Change in commercial papers | -5 422 | 11 116 | -------------------------------------------------------------------------------- | Commercial papers on 31 March | 9 914 | 16 518 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current loans on 1 January | 78 783 | 71 933 | -------------------------------------------------------------------------------- | Change in non-current loans | -1 233 | -316 | -------------------------------------------------------------------------------- | Non-current loans on 31 March | 77 550 | 71 617 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital loans on 1 January | 2 000 | 4 000 | -------------------------------------------------------------------------------- | Change in capital loans | 10 000 | | -------------------------------------------------------------------------------- | Capital loans on 31 March | 12 000 | 4 000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 31 March | 99 464 | 92 135 | -------------------------------------------------------------------------------- CHANGES IN FIXED ASSETS -------------------------------------------------------------------------------- | EUR 1 000 | 1-3/ | | 1-3/ | | 1-12/ | | | | 2008 | | 2007 | | 2007 | | -------------------------------------------------------------------------------- | | Tangibl | Intan-g | Tangibl | Intan-g | Tangible | Intan-gi | | | e | ible | e | ible | | ble | -------------------------------------------------------------------------------- | Book value at | 74 083 | 942 | 77 168 | 944 | 77 168 | 944 | | the beginning | | | | | | | | of the period | | | | | | | -------------------------------------------------------------------------------- | Investments | 887 | 25 | 2 250 | 33 | 11 087 | 179 | -------------------------------------------------------------------------------- | Decreases | | | -762 | -16 | -1 600 | | -------------------------------------------------------------------------------- | Depreciation | -3 290 | -49 | -3 509 | -51 | -13 730 | -203 | | and | | | | | | | | impairments | | | | | | | -------------------------------------------------------------------------------- | Translation | 369 | -37 | -286 | 35 | 1 158 | 22 | | differences | | | | | | | | and other | | | | | | | | changes | | | | | | | -------------------------------------------------------------------------------- | Book value at | 72 049 | 881 | 74 861 | 945 | 74 083 | 942 | | the end of the | | | | | | | | period | | | | | | | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR 1 000 | 3/2008 | 3/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FOR OWN DEBT | | | | -------------------------------------------------------------------------------- | Real estate mortgages | 5 045 | 5 046 | 5 045 | -------------------------------------------------------------------------------- | Corporate mortgages | | 1 177 | 1 177 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OTHER OWN COMMITMENTS | | | | -------------------------------------------------------------------------------- | Leasing payments and commitments | 8 576 | 8 500 | 10 226 | -------------------------------------------------------------------------------- | Rent commitments | 13 357 | 14 984 | 13 209 | -------------------------------------------------------------------------------- | Guarantee commitment for financial | 1 536 | 1 621 | 1 557 | | lease of discontinued operations | | | | -------------------------------------------------------------------------------- NOMINAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS -------------------------------------------------------------------------------- | EUR 1 000 | 3/2008 | 3/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENCY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 9 161 | 9 563 | 10 724 | -------------------------------------------------------------------------------- | Fair value | 118 | 56 | 69 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INTEREST RATE DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 73 667 | 60 633 | 65 667 | -------------------------------------------------------------------------------- | Fair value | 752 | 1 120 | 1 123 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ELECTRICITY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 4 281 | 5 551 | 4 683 | -------------------------------------------------------------------------------- | Fair value | 520 | 407 | 1 337 | -------------------------------------------------------------------------------- Helsinki, 23 April 2008 SUOMINEN CORPORATION Board of Directors Additional information: Mr. Kalle Tanhuanpää, President and CEO, tel. +358 (0)10 214 300.interim-23-04-2008.pdf
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