Cash flow from operations remained strong
SUOMINEN CORPORATION INTERIM REPORT 21 OCTOBER 2009 AT 1.30 P.M. INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2009 CASH FLOW FROM OPERATIONS REMAINED STRONG -------------------------------------------------------------------------------- | KEY FIGURES | 7-9/2009 | 7-9/2008 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR | 44.2 | 55.2 | 134.5 | 164.8 | 214.6 | | million | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 1.0 | -0.8 | 6.1 | -0.3 | -4.0 | | EUR million | | | | | | -------------------------------------------------------------------------------- | Profit/loss for | -0.4 | -1.5 | 1.2 | -2.9 | -7.2 | | the period, EUR | | | | | | | million | | | | | | -------------------------------------------------------------------------------- | Earnings/share, | -0.02 | -0.06 | 0.05 | -0.12 | -0.31 | | EUR | | | | | | -------------------------------------------------------------------------------- | Cash flow from | 0.18 | 0.38 | 1.05 | 0.51 | 0.80 | | operations/share, | | | | | | | EUR | | | | | | -------------------------------------------------------------------------------- Outlook: The financial performance and profit after taxes for 2009 are expected to improve on the previous year. Net sales for 2009 are expected to be lower than in 2008. GROUP FINANCIAL RESULTS Suominen Corporation generated net sales of EUR 44.2 million (55.2) in the third quarter. Operating profit was EUR 1.0 million (-0.8), profit before taxes EUR -0.6 million (-2.0) and profit after taxes EUR -0.4 million (-1.5). Net sales for the nine-month period totalled EUR 134.5 million (164.8). Operating profit was EUR 6.1 million (-0.3), profit before taxes EUR 1.4 million (-3.8) and profit after taxes EUR 1.2 million (-2.9). Net sales declined by 18 per cent compared to the corresponding period in 2008. Almost one third of the decline resulted from a decrease in raw material prices and its impact on sales prices. The decrease in sales is presumed to be attributable to consumers' shift towards less expensive product categories of daily consumer goods and weaker consumer demand. Part of the decline results from the implemented rationalisation measures. Suominen's cost-saving and operational enhancement programmes have continued, which brought operating expenses to a substantially lower level than in 2008. The prices of oil-based raw materials continued their steady rise which began in the first quarter. Suominen has been able to improve the sales margins on the previous year. The release of working capital and the low level of investments strengthened the Company's financial position. The strong cash flow from operations, EUR 25.0 million (12.1), was used to reduce net debt by EUR 21.9 million during the period under review. Cost-saving and operational enhancement programme Suominen's Stairs to Top programme was continued by improving operational efficiency and renewing the product offering. The most significant savings were generated in personnel expenses, purchases and logistics. Despite the lower production volumes, the yield and production efficiency improved. The cost savings and efficiency-enhancement measures generated some EUR 6 million. The efficiency of the use of funds was improved by releasing working capital and limiting investments to measures that improve efficiency. The sales programmes yielded good results in Flexibles with several new packaging solutions and in Nonwovens with new raw material-saving solutions for wipes, and geographically in Russia. Financing The Group's interest-bearing net liabilities totalled EUR 61.7 million (91.2) including capital loans of EUR 8.0 million (10.0). Repayments of non-current loans were EUR 22.7 million. Net financial expenses were EUR 4.7 million (3.5) or 3.5 per cent (2.2) of net sales. Financial expenses include a total of EUR 0.6 million in write-offs of investment assets. A total of EUR 15.7 million was released in the working capital. A total of EUR 9.7 million of trade receivables was sold to the bank; at the start of the year, the corresponding figure was EUR 1.8 million. The equity ratio was 29.5 per cent (27.2). When the capital loans are included in shareholders' equity, the equity ratio was 36.0 per cent (33.4) and the ratio of liabilities to shareholders' equity 115.9 per cent (146.0). Cash flow from operations was EUR 1.05 per share (0.51). Investments The Company's gross investments in production totalled EUR 3.0 million (3.5). Planned depreciation amounted to EUR 7.6 million (9.6). Codi Wipes accounted for EUR 0.7 million (0.5), Nonwovens EUR 1.0 million (1.3) and Flexibles EUR 1.3 million (1.6) of total investments. The most significant new investments were Suominen Codi Wipes' investment in an automatic line and Suominen Flexibles' investment in a bag making machine that manufactures retail carrier bags. Other investments were efficiency-enhancement and maintenance investments. SEGMENT RESULTS During the period under review, net sales of the Wiping business area totalled EUR 85.8 million, having a decrease of 21 per cent on the corresponding period in 2008. The business area's operating profit was EUR 3.4 million (-0.3). Net sales of Codi Wipes, at EUR 47.7 million, declined by 14 per cent on the previous year. Sales declined most clearly in personal care wipes and in particular in household wipes, with a less marked decline in baby wipes. In addition, the discarding of unprofitable product groups during the first half of the year reduced net sales. The sales margins improved on the previous year. The unit's rationalisation programme progressed according to plan, and operating expenses decreased considerably. The automatic line included in the rationalisation programme was delivered at the end of the period, and production is scheduled to start at the beginning of the final quarter. Net sales of Nonwovens decreased by 27 per cent to EUR 44.4 million. Delivery volumes of nonwovens for wipes fell both in Europe and the USA. Deliveries of hygiene product materials also fell slightly below the level of the previous year, while the sales of health care products remained on level with the previous year. Average sales prices fell in line with the decrease in raw material prices, but the sales margins improved on the previous year. In a compressed timetable, the unit developed a new raw material-saving nonwoven tailored to the market situation. Its sales took off well during the summer. Likewise, deliveries to the Russian market grew rapidly. Operating expenses decreased considerably, production efficiency improved and the amount of wastage decreased compared to 2008. Net sales of Flexibles totalled EUR 49.5 million (57.1) and operating profit was EUR 3.1 million (0.4). Net sales declined by 13 per cent. A fall was experienced in hygiene packaging, retail packaging as well as in security and system packaging. Sales of food packaging almost reached the level of 2008. Sales to Russia remained on par with the previous year. Due to lower raw material prices, sales prices fell, but the unit was able to improve its sales margins. Sales of Amer product family progressed. Costs decreased due to personnel reductions and savings in purchases and fixed costs. A decision was made to end production in Sweden by the end of January 2010 and transfer the production machinery to Poland. The measure is estimated to result in a net personnel reduction of approximately 20 people and a total of some EUR 0.5 million in extra costs for the last quarter. The demand for security and system packaging weakened, and the Ikaalinen plant has therefore prepared for temporary lay-offs affecting some 60 people to be implemented during the remainder of the year. SHARE CAPITAL AND SHARES 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. Share trading and price The number of Suominen Corporation shares traded on NASDAQ OMX Helsinki from 1 January to 30 September 2009 was 2,045,600 shares, equivalent to 8.6 per cent of shares included in the Company's share capital. The trading price varied between EUR 0.65 and EUR 1.51. The final trading price was EUR 1.35, giving the Company a market capitalisation of EUR 32.0 million on 30 September 2009. The Company's own shares On 1 January 2009, the Company held 55,057 of its own shares, accounting for 0.2 per cent of the share capital and votes. The Annual General Meeting of Shareholders held on 20 March 2009 authorised the Board of Directors to decide on the acquisition of a maximum of 200,000 of the Company's own shares. The authorisation will be valid for 18 months after the decision of the General Meeting. The shares shall be repurchased to improve Company's capital structure and/or to be used as consideration in future acquisitions or other arrangements related to the Company's business or as part of the Company's incentive program, and/or to finance investments. Shares may be held, cancelled or conveyed by the Company. The Company's own shares shall be repurchased otherwise than in proportion to the holdings of the shareholders by using the non-restricted equity through public trading on NASDAQ OMX Helsinki Ltd 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 255,057 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 54,375 of its own shares as emoluments to the Board of Directors in the period under review. The price of the conveyed shares was EUR 0.80 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 2009, Suominen Corporation held a total of 682 of its own shares, accounting for 0.0 per cent of the share capital and votes. Stock options The Annual General Meeting of Shareholders held on 20 March 2009 approved stock option plan 2009. Under the plan, a maximum of 450,000 stock options shall be issued to the President and CEO and to the members of the Corporate Executive Team 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 2009A stock option plan a total of 150,000 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 NASDAQ OMX Helsinki Ltd. in May 2009 or EUR 1.46. The subscription period for the 2009A stock options is from 2 May 2011 to 30 October 2012. During the period under review, a total of 15,000 stock options marked with the symbol 2007A have been returned to the Company. Suominen has stock option plans 2006, 2007 and 2009. As the registered number of Suominen's issued shares totals 23,720,112, the number of shares may rise to a maximum of 24,670,112 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 October 2009, Etra Invest Oy reported that on 1 October 2009 its holding in the share capital and voting rights of Suominen Corporation had grown to 16.44 per cent. OUTLOOK Demand for Suominen's products is evaluated on the basis of customer contracts and use forecast provided by customers. The short-term use forecasts provided by customers indicate lower volumes than in 2008. Suominen's net sales will decline compared to 2008 due to the general economic situation and the rationalisation measures implemented in the business units. In this respect, the last quarter is expected to be similar to the previous ones. The focus of the Company's operations is on improving profitability, and strengthening its cash flow and capital structure. The Stairs to Top enhancement programme will be continued throughout the Group, and is expected to improve Suominen's competitiveness. The prices for plastic raw materials have been strongly rising during the year despite the soft demand. The financial performance and profit after taxes for 2009 are expected to improve on the previous year. 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 net sales. Due to the uncertain global economic situation, the forecasts are vulnerable to a significant amount of uncertainty. Nonwovens and Flexibles purchase oil-based raw materials to the value of some EUR 40 million annually. In addition, significant amounts of viscose, printing inks, and solvents are also purchased. Rapid fluctuations in the world market prices of raw materials affect Suominen's profitability. 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 increase. Delays in the implementation of measures or their failure would have a negative impact on the Company's result. The safety margin of the critical covenants of Suominen's credit agreements has increased due to the good cash flow from operations. However, a significant or long-term decrease in the cash flow from operations may result in a situation where the Company does not meet the financial conditions. In this case, the banks have the right to declare the credits due and payable and renegotiate the terms. The sensitivity of Suominen's group goodwill, and possible changes in the general assumptions are described in the notes to the financial statements for 2008. Suominen's business risks are described in the report of the Board of Directors for 2008. SUOMINEN CORPORATION CONSOLIDATED 1 JANUARY - 30 SEPTEMBER 2009 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 2008, and this interim report should be read parallel to the financial statements for 2008. Changes to published accounting standards and interpretations, together with the new accounting standards that came into force on 1 January 2009, are presented in the financial statements for 2008. All calculations in this interim report have been prepared in compliance with revised IAS 1, ‘Presentation of Financial Statements'. The revised standard is aimed at improving users' ability to analyse and compare the information given in financial statements by separating changes in equity of an entity arising from transactions with owners from other changes in equity. Non-owner changes in equity will be presented in the statement of comprehensive income. The figures in this interim report have not been audited. BALANCE SHEET -------------------------------------------------------------------------------- | EUR 1 000 | 9/2009 | 9/2008 | 12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Goodwill | 23 404 | 25 604 | 23 404 | -------------------------------------------------------------------------------- | Intangible non-current assets | 718 | 895 | 855 | -------------------------------------------------------------------------------- | Tangible non-current assets | 57 781 | 68 767 | 62 661 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 212 | 712 | 627 | -------------------------------------------------------------------------------- | Held-to-maturity investments | 225 | 100 | 172 | -------------------------------------------------------------------------------- | Deferred tax assets | 1 227 | 469 | 1 562 | -------------------------------------------------------------------------------- | Non-current assets, total | 83 567 | 96 546 | 89 281 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 21 366 | 27 224 | 24 050 | -------------------------------------------------------------------------------- | Trade receivables | 12 147 | 28 272 | 21 174 | -------------------------------------------------------------------------------- | Other current receivables | 2 966 | 5 139 | 4 843 | -------------------------------------------------------------------------------- | Income tax receivables | 1 267 | 828 | 228 | -------------------------------------------------------------------------------- | Cash at bank and in hand | 2 101 | 2 053 | 4 243 | -------------------------------------------------------------------------------- | Current assets, total | 39 847 | 63 515 | 54 538 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets, total | 123 414 | 160 061 | 143 819 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity attributable to owners of the | | | | | parent | | | | -------------------------------------------------------------------------------- | Share capital | 11 860 | 11 860 | 11 860 | -------------------------------------------------------------------------------- | Share premium account | 24 681 | 24 681 | 24 681 | -------------------------------------------------------------------------------- | Fair value and other reserves | -717 | 1 513 | -540 | -------------------------------------------------------------------------------- | Translation differences | -267 | 1 452 | -288 | -------------------------------------------------------------------------------- | Other shareholders' equity | 848 | 3 981 | -323 | -------------------------------------------------------------------------------- | Shareholders' equity, total | 36 405 | 43 487 | 35 390 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 3 747 | 5 026 | 3 684 | -------------------------------------------------------------------------------- | Capital loans | 6 000 | 8 000 | 8 000 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 44 001 | 41 896 | 66 436 | -------------------------------------------------------------------------------- | Non-current liabilities, total | 53 748 | 54 922 | 78 120 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 9 686 | 39 258 | 9 967 | -------------------------------------------------------------------------------- | Capital loans | 2 000 | 2 000 | 2 000 | -------------------------------------------------------------------------------- | Income tax liabilities | 828 | 274 | 229 | -------------------------------------------------------------------------------- | Trade payables and other current | 20 747 | 20 120 | 18 113 | | liabilities | | | | -------------------------------------------------------------------------------- | Current liabilities, total | 33 261 | 61 652 | 30 309 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities, total | 87 009 | 116 574 | 108 429 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and liabilities, | 123 414 | 160 061 | 143 819 | | total | | | | -------------------------------------------------------------------------------- STATEMENT OF INCOME -------------------------------------------------------------------------------- | EUR 1 000 | 7-9/2009 | 7-9/2008 | 1-9/2009 | 1-9/2008 |1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | 44 167 | 55 151 | 134 499 | 164 781 | 214 605 | -------------------------------------------------------------------------------- | Cost of goods sold | -39 939 | -53 174 | -118 649 | -156 659 | -203 429 | -------------------------------------------------------------------------------- | GROSS PROFIT | 4 228 | 1 977 | 15 850 | 8 122 | 11 176 | -------------------------------------------------------------------------------- | Other operating | 28 | 15 | 406 | 525 | 1 547 | | income | | | | | | -------------------------------------------------------------------------------- | Sales and marketing | -920 | -835 | -2 630 | -2 470 | -3 319 | | expenses | | | | | | -------------------------------------------------------------------------------- | Research and | -614 | -503 | -1 613 | -1 565 | -2 233 | | development | | | | | | -------------------------------------------------------------------------------- | Administration | -1 695 | -1 379 | -5 443 | -4 825 | -6 667 | | expenses | | | | | | -------------------------------------------------------------------------------- | Other operating | -55 | -40 | -469 | -59 | -2 060 | | expenses | | | | | | -------------------------------------------------------------------------------- | OPERATING PROFIT | 971 | -765 | 6 100 | -272 | -1 555 | | BEFORE IMPAIRMENT | | | | | | | LOSSES | | | | | | -------------------------------------------------------------------------------- | Impairment losses | | | | | -2 490 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 971 | -765 | 6 100 | -272 | -4 045 | -------------------------------------------------------------------------------- | Financial income and | -1 528 | -1 260 | -4 656 | -3 544 | -4 796 | | expenses | | | | | | -------------------------------------------------------------------------------- | PROFIT BEFORE INCOME | -557 | - 2 025 | 1 444 | -3 816 | -8 841 | | TAXES | | | | | | -------------------------------------------------------------------------------- | Income taxes | 192 | 500 | -236 | 964 | 1 600 | -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE | -365 | -1 525 | 1 208 | -2 852 | -7 241 | | PERIOD | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.02 | -0.06 | 0.05 | -0.12 | -0.31 | -------------------------------------------------------------------------------- STATEMENT OF COMPREHENSIVE INCOME -------------------------------------------------------------------------------- | EUR 1 000 | 7-9/2009 |7-9/2008 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit/loss for the | -365 | -1 525 | 1 208 | -2 852 | -7 241 | | period | | | | | | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Other comprehensive | | | | | | | income | | | | | | -------------------------------------------------------------------------------- | Total exchange | 804 | -280 | 29 | 248 | -2 014 | | differences on | | | | | | | foreign operations | | | | | | -------------------------------------------------------------------------------- | Fair value changes of | -10 | -1 430 | -380 | -334 | -2 990 | | cash flow hedges | | | | | | -------------------------------------------------------------------------------- | Fair value changes of | | | 73 | | -73 | | available-for-sale | | | | | | | assets | | | | | | -------------------------------------------------------------------------------- | Other | -76 | -7 | -81 | -76 | -8 | | reclassifications | | | | | | -------------------------------------------------------------------------------- | Income tax on other | -207 | 429 | 72 | 89 | 1 320 | | comprehensive income | | | | | | -------------------------------------------------------------------------------- | Total other | 511 | -1 288 | -287 | -73 | -3 765 | | comprehensive income | | | | | | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Total comprehensive | 146 | -2 813 | 921 | -2 925 | -11 006 | | income for the period | | | | | | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY -------------------------------------------------------------------------------- | EUR 1 000 | Share| Share | Own |Transla- | Fair |Retained | Total | | |capital|premium | shares | tion | value |earnings | | | | |account | | differ- |reserves | | | | | | | | ences | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total |11 860 | 24 681 | -50 | -288 | -490 | -323 | 35 390 | | equity at | | | | | | | | | 1 Jan. 2009 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | | | | 21 | -227 | 1 127 | 921 | | compre- | | | | | | | | | hensive | | | | | | | | | income | | | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | 51 | 51 | | payments | | | | | | | | -------------------------------------------------------------------------------- | Conveyance | | | 49 | | | -6 | 43 | | of own | | | | | | | | | shares | | | | | | | | -------------------------------------------------------------------------------- | Total |11 860 | 24 681 | -1 | -267 | -717 | 849 | 36 405 | | equity at | | | | | | | | | 30 Sept. | | | | | | | | | 2009 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1 000 | Share| Share | Own |Transla- | Fair |Retained | Total | | |capital|premium | shares | tion | value |earnings | | | | |account | | differ- |reserves | | | | | | | | ences | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total |11 860 | 24 681 | -115 | 1 202 | 1 776 | 6 903 | 46 307 | | equity at | | | | | | | | | 1 Jan. 2008 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | | | | 250 | -247 | -2 928 | -2 925 | | compre- | | | | | | | | | hensive | | | | | | | | | income | | | | | | | | -------------------------------------------------------------------------------- | Share- | | | | | | 54 | 54 | | based | | | | | | | | | payments | | | | | | | | -------------------------------------------------------------------------------- | Conveyance | | | 99 | | | -48 | 51 | | of own | | | | | | | | | shares | | | | | | | | -------------------------------------------------------------------------------- | Total |11 860 | 24 681 | -16 | 1 452 | 1 529 | 3 981 | 43 487 | | equity at | | | | | | | | | 30 Sept. | | | | | | | | | 2008 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1 000 | Share| Share | Own |Transla- | Fair |Retained | Total | | |capital|premium | shares | tion | value |earinings| | | | |account | | differ- |reserves | | | | | | | | ences | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total |11 860 | 24 681 | -115 | 1 202 | 1 776 | 6 903 | 46 307 | | equity at | | | | | | | | | 1 Jan. 2008 | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | | | | -1 490 | -2 267 | -7 249 |-11 006 | | compre- | | | | | | | | | hensive | | | | | | | | | income | | | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | 72 | 72 | | payments | | | | | | | | -------------------------------------------------------------------------------- | Repurchase | | | -34 | | | | -34 | | of own | | | | | | | | | shares | | | | | | | | -------------------------------------------------------------------------------- | Conveyance | | | 99 | | | -48 | 51 | | of own | | | | | | | | | shares | | | | | | | | -------------------------------------------------------------------------------- | Total |11 860 | 24 681 | -50 | -288 | -490 | -323 | 35 390 | | equity at | | | | | | | | | 31 Dec. | | | | | | | | | 2008 | | | | | | | | -------------------------------------------------------------------------------- CASH FLOW STATEMENT -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operations | | | | -------------------------------------------------------------------------------- | Operating profit | 6 100 | -272 | -4 045 | -------------------------------------------------------------------------------- | Total adjustments | 7 984 | 9 340 | 14 763 | -------------------------------------------------------------------------------- | Cash flow before change in working | 14 085 | 9 068 | 10 718 | | capital | | | | -------------------------------------------------------------------------------- | Change in working capital | 15 685 | 5 972 | 12 255 | -------------------------------------------------------------------------------- | Financial items | -4 596 | -2 790 | -4 682 | -------------------------------------------------------------------------------- | Taxes paid | -206 | -125 | 621 | -------------------------------------------------------------------------------- | Cash flow from operations | 24 968 | 12 125 | 18 912 | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Investment payments | | | | -------------------------------------------------------------------------------- | Investments in tangible and intangible | -2 798 | -3 536 | -3 578 | | assets | | | | -------------------------------------------------------------------------------- | Proceeds from disposal of fixed assets | 218 | 287 | 274 | | and other proceeds | | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | -2 580 | -3 249 | -3 304 | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Financing | | | | -------------------------------------------------------------------------------- | Non-current loans drawn | 41 478 | | 33 000 | -------------------------------------------------------------------------------- | Repayments of non-current loans | -64 058 | -8 525 | -35 147 | -------------------------------------------------------------------------------- | Withdrawals of capital loans | | 10 000 | 10 000 | -------------------------------------------------------------------------------- | Repayments of capital loans | -2 000 | -2 000 | -2 000 | -------------------------------------------------------------------------------- | Repurchase and conveyance of own shares | 44 | | 17 | -------------------------------------------------------------------------------- | Change in current loans | | -7 440 | -18 336 | -------------------------------------------------------------------------------- | Cash flow from financing | -24 536 | -7 965 | -12 466 | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -2 149 | 911 | 3 142 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, change, % * | -19.9 | -1.0 | -18.4 | 2.2 | -0.3 | -------------------------------------------------------------------------------- | Gross profit, % ** | 9.6 | 3.6 | 11.8 | 4.9 | 5.2 | -------------------------------------------------------------------------------- | Operating profit, % ** | 2.2 | -1.4 | 4.5 | -0.2 | -1.9 | -------------------------------------------------------------------------------- | Financial income and | -3.5 | -2.3 | -3.5 | -2.2 | -2.2 | | expenses, % ** | | | | | | -------------------------------------------------------------------------------- | Profit before income taxes, % | -1.3 | -3.7 | 1.1 | -2.3 | -4.1 | | ** | | | | | | -------------------------------------------------------------------------------- | Profit for the period, % ** | -0.8 | -2.8 | 0.9 | -1.7 | -3.4 | -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.02 | -0.06 | 0.05 | -0.12 | -0.31 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity/share, EUR | | | 1.53 | 1.83 | 1.49 | -------------------------------------------------------------------------------- | Cash flow from | | | 1.05 | 0.51 | 0.80 | | operations/share, EUR | | | | | | -------------------------------------------------------------------------------- | Return on equity (ROE), % | | | 4.5 | -8.4 | -16.7 | -------------------------------------------------------------------------------- | Return on invested capital | | | 7.5 | -0.2 | -2.9 | | (ROI), % | | | | | | -------------------------------------------------------------------------------- | Equity ratio, % | | | 29.5 | 27.2 | 24.6 | -------------------------------------------------------------------------------- | Gearing, % | | | 163.4 | 202.5 | 229.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross investments, EUR 1 000 | | | 3 000 | 3 536 | 3 910 | -------------------------------------------------------------------------------- | Depreciation, EUR 1 000 | | | 7 626 | 9 639 | 12 595 | -------------------------------------------------------------------------------- | Impairment losses, EUR 1 000 | | | | | 2 490 | -------------------------------------------------------------------------------- * Compared with the corresponding period of the previous year. ** As of net sales. SEGMENT REPORTING WIPING -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | Change % | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | - Codi Wipes | 47 656 | 55 367 | -13.9 | 72 367 | -------------------------------------------------------------------------------- | - Nonwovens | 44 406 | 60 820 | -27.0 | 76 320 | -------------------------------------------------------------------------------- | - eliminations | -6 296 | -8 023 | | -10 166 | -------------------------------------------------------------------------------- | Total | 85 766 | 108 164 | -20.7 | 138 521 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit before | 3 401 | -318 | | -2 266 | | impairment losses | | | | | -------------------------------------------------------------------------------- | % of net sales | 4.0 | -0.3 | | -1.6 | -------------------------------------------------------------------------------- | Impairment losses | | | | -2 490 | -------------------------------------------------------------------------------- | Operating profit | 3 401 | -318 | | -4 756 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 79 106 | 102 596 | | 93 804 | -------------------------------------------------------------------------------- | Liabilities | 11 257 | 13 474 | | 12 242 | -------------------------------------------------------------------------------- | Net assets | 67 849 | 89 122 | | 81 562 | -------------------------------------------------------------------------------- | Investments | 1 691 | 1 869 | | 2 042 | -------------------------------------------------------------------------------- | Depreciation | 5 152 | 5 702 | | 7 525 | -------------------------------------------------------------------------------- | Impairment losses | | | | 2 490 | -------------------------------------------------------------------------------- | Average personnel | 390 | 456 | | 445 | -------------------------------------------------------------------------------- FLEXIBLES -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | Change % | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 49 531 | 57 068 | -13.2 | 76 795 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 3 136 | 372 | | 1 191 | -------------------------------------------------------------------------------- | % of net sales | 6.3 | 0.7 | | 1.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 44 203 | 56 192 | | 47 183 | -------------------------------------------------------------------------------- | Liabilities | 8 663 | 8 975 | | 8 136 | -------------------------------------------------------------------------------- | Net assets | 35 540 | 47 217 | | 39 047 | -------------------------------------------------------------------------------- | Investments | 1 309 | 1 632 | | 1 820 | -------------------------------------------------------------------------------- | Depreciation | 2 420 | 3 906 | | 5 033 | -------------------------------------------------------------------------------- | Average personnel | 540 | 571 | | 562 | -------------------------------------------------------------------------------- NON-ALLOCATED ITEMS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | -798 | -451 | -711 | -------------------------------------------------------------------------------- | Operating profit | -437 | -326 | -480 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 105 | 1 273 | 2 832 | -------------------------------------------------------------------------------- | Liabilities | 67 090 | 94 125 | 89 244 | -------------------------------------------------------------------------------- | Investments | | 35 | 48 | -------------------------------------------------------------------------------- | Depreciation | 53 | 31 | 37 | -------------------------------------------------------------------------------- | Average personnel | 11 | 12 | 12 | -------------------------------------------------------------------------------- NET SALES BY MARKET AREA -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 22 852 | 26 134 | 34 954 | -------------------------------------------------------------------------------- | Scandinavia | 11 838 | 13 518 | 18 375 | -------------------------------------------------------------------------------- | The Netherlands | 9 596 | 13 694 | 16 891 | -------------------------------------------------------------------------------- | Other Europe | 77 584 | 91 117 | 119 573 | -------------------------------------------------------------------------------- | Other countries | 12 630 | 20 318 | 24 812 | -------------------------------------------------------------------------------- | Net sales, total | 134 499 | 164 781 | 214 605 | -------------------------------------------------------------------------------- QUARTERLY FIGURES -------------------------------------------------------------------------------- | EUR 1 000 | IV/2008 | I/2009 | II/2009 | III/2009 | IV/2008- | | | | | | | III/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | | | | | | -------------------------------------------------------------------------------- | Wiping | | | | | | -------------------------------------------------------------------------------- | - Codi Wipes | 17 000 | 15 914 | 15 899 | 15 843 | 64 656 | -------------------------------------------------------------------------------- | - Nonwovens | 15 500 | 16 822 | 13 947 | 13 637 | 59 906 | -------------------------------------------------------------------------------- | - eliminations | -2 143 | -2 372 | -2 356 | -1 567 | -8 439 | -------------------------------------------------------------------------------- | Total | 30 357 | 30 364 | 27 489 | 27 913 | 116 123 | -------------------------------------------------------------------------------- | Flexibles | 19 727 | 16 380 | 16 638 | 16 513 | 69 258 | -------------------------------------------------------------------------------- | Non-allocated items | -260 | 200 | -739 | -259 | -1 058 | -------------------------------------------------------------------------------- | Net sales, total | 49 824 | 46 944 | 43 388 | 44 167 | 184 323 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT | | | | | | -------------------------------------------------------------------------------- | Wiping | -369 | 1 405 | 1 319 | 677 | 3 032 | -------------------------------------------------------------------------------- | % of net sales | -1.2 | 4.6 | 4.8 | 2.4 | 2.6 | -------------------------------------------------------------------------------- | Flexibles | 819 | 2 220 | 420 | 496 | 3 955 | -------------------------------------------------------------------------------- | % of net sales | 4.2 | 13.6 | 2.5 | 3.0 | 5.7 | -------------------------------------------------------------------------------- | Non-allocated items | -154 | -74 | -161 | -202 | -591 | -------------------------------------------------------------------------------- | Operating profit | 296 | 3 551 | 1 578 | 972 | 6 396 | | before | | | | | | | non-recurring costs | | | | | | | and impairment | | | | | | | losses | | | | | | -------------------------------------------------------------------------------- | % of net sales | 0.6 | 7.6 | 3.6 | 2.2 | 3.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-recurring costs | -1 579 | | | | -1 579 | -------------------------------------------------------------------------------- | Impairment losses | -2 490 | | | | -2 490 | -------------------------------------------------------------------------------- | Operating profit, | -3 773 | 3 551 | 1 578 | 972 | 2 327 | | total | | | | | | -------------------------------------------------------------------------------- | % of net sales | -7.6 | 7.6 | 3.6 | 2.2 | 1.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET FINANCIAL | -1 252 | -1 539 | -1 589 | -1 529 | -5 908 | | EXPENSES | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT BEFORE | -5 025 | 2 012 | -11 | -557 | -3 581 | | INCOME TAXES | | | | | | -------------------------------------------------------------------------------- TAXES FOR THE PERIOD UNDER REVIEW Income tax expense is recognised based on the estimated average income tax rate for the full financial year. 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 671 thousand, share-based payments EUR 51 thousand, unsecured loans EUR 880 thousand, and interest payments EUR 127 thousand. MOVEMENTS IN BORROWINGS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 1 January | 86 403 | 99 119 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Current loans from financial institutions on 1 | | 3 000 | | January | | | -------------------------------------------------------------------------------- | Change in current loans from financial institutions | | -1 000 | -------------------------------------------------------------------------------- | Current loans from financial institutions on 30 | 0 | 2 000 | | Sept. | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Commercial papers on 1 January | | 15 336 | -------------------------------------------------------------------------------- | Change in commercial papers | | -6 440 | -------------------------------------------------------------------------------- | Commercial papers on 30 Sept. | 0 | 8 896 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Non-current loans on 1 January | 76 403 | 78 783 | -------------------------------------------------------------------------------- | Change in non-current loans | -22 716 | -8 525 | -------------------------------------------------------------------------------- | Non-current loans on 30 Sept. | 53 687 | 70 258 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Capital loans on 1 January | 10 000 | 2 000 | -------------------------------------------------------------------------------- | Change in capital loans | -2 000 | 8 000 | -------------------------------------------------------------------------------- | Capital loans on 30 Sept. | 8 000 | 10 000 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Total borrowings on 30 September | 61 687 | 91 154 | -------------------------------------------------------------------------------- CHANGES IN FIXED ASSETS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/ | | 1-9/ | | 1-12/ | | | | 2009 | | 2008 | | 2008 | | -------------------------------------------------------------------------------- | | Tangi- | Intan- | Tangi- | Intan- | Tangi- | Intan- | | | ble | gible | ble | gible | ble | gible | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book value at the | 62 661 | 855 | 74 083 | 942 | 74 083 | 942 | | beginning of the | | | | | | | | period | | | | | | | -------------------------------------------------------------------------------- | Investments | 2 929 | 18 | 3 416 | 120 | 3 701 | 137 | -------------------------------------------------------------------------------- | Decreases | -151 | | -132 | -2 | -2 305 | | -------------------------------------------------------------------------------- | Depreciation and | -7 472 | -154 | -9 473 | -166 | -12 666 | -219 | | impairment | | | | | | | -------------------------------------------------------------------------------- | Translation | -186 | -1 | 873 | 1 | -152 | -5 | | differences and | | | | | | | | other changes | | | | | | | -------------------------------------------------------------------------------- | Book value at the | 57 781 | 718 | 68 767 | 895 | 62 661 | 855 | | end of the period | | | | | | | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FOR OWN DEBT | | | | -------------------------------------------------------------------------------- | Real estate mortgages | 24 045 | 5 045 | 24 045 | -------------------------------------------------------------------------------- | Corporate mortgages | 50 000 | | 50 000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OTHER OWN COMMITMENTS | | | | -------------------------------------------------------------------------------- | Operating leases, real estates | 11 016 | 11 218 | 12 389 | -------------------------------------------------------------------------------- | Operating leases, machinery and | 9 238 | 11 906 | 10 215 | | equipment | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Guarantee commitments | 1 515 | 1 491 | 1 468 | -------------------------------------------------------------------------------- NOMINAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS -------------------------------------------------------------------------------- | EUR 1 000 | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENCY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 5 584 | 3 234 | 6 548 | -------------------------------------------------------------------------------- | Fair value | -19 | 74 | 121 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INTEREST RATE DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 33 500 | 68 700 | 58 700 | -------------------------------------------------------------------------------- | Fair value | -621 | 867 | -297 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ELECTRICITY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 1 826 | 3 115 | 2 973 | -------------------------------------------------------------------------------- | Fair value | -464 | 1 200 | -394 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | COMMODITY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 1 742 | | | -------------------------------------------------------------------------------- | Fair value | -14 | | | -------------------------------------------------------------------------------- Helsinki, 21 October 2009 SUOMINEN CORPORATION Board of Directors For addition information please contact: Mr. Petri Rolig, President and CEO, tel. +358 (0)10 214 300 Mr. Arto Kiiskinen, Vice President and CFO, tel. +358 (0)10 214 300interim-21-10-2009.pdf
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