Suominen Corporation’s Half-Year Financial Report for 1 January–30 June 2018: Net sales and operating profit declined, guidance concerning operating profit specified, the new production line at Bethune, US turned positive on gross profit

Suominen Corporation   Half-Year Financial Report   3 August 2018 at 8:00 am (EEST)

Suominen Corporation’s Half-Year Financial Report for 1 January–30 June 2018:
Net sales and operating profit declined, guidance concerning operating profit specified, the new production line at Bethune, US turned positive on gross profit


KEY FIGURES

  4-6/ 4-6/ 1-6/ 1-6/ 1-12/
  2018 2017 2018 2017 2017
Net sales, EUR million 110.0 112.0 216.6 224.9 426.0
Comparable operating profit, EUR million 2.9 4.4 4.5 10.6 15.0
Operating profit, EUR million 2.9 4.4 4.5 10.6 15.0
Profit for the period, EUR million 1.8 2.1 1.4 6.4 14.5
Earnings per share, basic, EUR 0.03 0.04 0.03 0.12 0.27
Earnings per share, diluted, EUR 0.03 0.04 0.03 0.11 0.25
Cash flow from operations per share, EUR 0.19 0.19 0.28 0.31 0.39
Return on invested capital, rolling 12 months, %  4.1 9.7 6.6
Gearing, % 59.6 53.7 59.5*

*restated

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

Highlights in April-June 2018:


- Net sales decreased by 2% and amounted to EUR 110.0 million (112.0). The impact of EUR/USD exchange rate changes decreased the reported net sales by EUR -5.2 million.
- Operating profit declined by 34% to EUR 2.9 million (4.4) mainly due to tight price competition in flushable products and certain issues with delivery efficiency.
- Cash flow from operations was EUR 10.8 million (10.2), favorably impacted by tax refunds of EUR 7.0 million in the US.
- The new manufacturing line at Bethune, SC, US plant line turned positive on gross profit towards the end of the quarter.

- Suominen specifies its outlook and expects that in 2018, its net sales will improve from 2017 and its comparable operating profit will be at the level of 2017. Earlier Suominen estimated that its net sales and comparable operating profit will improve from 2017.

In 2017, Suominen’s net sales amounted to EUR 426.0 million and operating profit to EUR 15.0 million. In financial year 2017 Suominen had no items affecting the comparability of the operating profit. The calculation of comparable operating profit is explained in the disclosures of this release.


Nina Kopola, President & CEO, comments on Suominen’s second quarter of 2018:

“In Suominen’s main market areas, Europe and North America, the consumer confidence indices remained strong. Our nonwovens are, for the most part, used in daily consumer goods, and in these target markets the general economic situation and consumer confidence drive the development of consumer demand.

Suominen’s net sales were EUR 110.0 million. Determined measures taken in pricing as well as the favorable change in the product portfolio had a positive impact on the net sales, however counteracted by the changes in EUR/USD exchange rate. The weakening of the USD compared to EUR decreased our net sales by EUR -5.2 million in the second quarter.

Our operating profit declined from the second quarter of 2017 to EUR 2.9 million, mainly due to the tight price competition particularly in nonwovens for flushable products. Moreover, we still experienced some issues with the delivery efficiency, mainly deriving from freight constraints in the US. Changes in the EUR/USD exchange rate decreased the operating profit by EUR 0.3 million. However, from the first quarter of 2018, our operating profit nearly doubled, signaling that the measures we have taken in our profitability improvement program, 3P, are carrying fruit and that we have now started to gradually turn the company’s negative profitability trend around. To signal the gradual nature of the development, we now specify our guidance regarding operating profit in 2018.

The 3P program was launched in the end of 2017 and it focuses on improving Suominen’s profitability through Pricing, Performance and Planning.

In the second quarter, volumes sold decreased marginally, but we were able to further increase the average sales price compared both with the corresponding quarter last year and with the first quarter of 2018. Average price was also impacted by the product mix: the composition of our product portfolio improved and the share of products with high value added in our net sales rose to 62% at the end of the reporting period (59% in the corresponding period last year).

In terms of improving performance, which is the second P in our 3P program, I am very pleased to announce that our new manufacturing line at Bethune, SC, US plant turned positive on gross profit. This eagerly awaited milestone was achieved towards the end of the second quarter, thanks to the clear improvement in the stability and reliability of the new line.

Third P of the program is for Planning, and here our on-going group-wide ICT systems renewal plays an important role. The systems renewal continued as scheduled in the second quarter and the new systems were taken into use at both our plants in Italy. The systems renewal represents an enabler for growth as it allows us to tangibly enhance the planning and optimization of our operations. At the moment, four out of our eight plants operate through the new ICT systems and we expect most of the plants to have the new systems in place by end of 2018.

The profit for the reporting period stood at EUR 1.8 million. Cash flow from operations was significantly impacted by tax refunds paid in the US.

The ongoing growth investment initiative at our plant in Green Bay, WI, US is proceeding as planned and in schedule. We expect the enhanced capabilities to be in full utilization by end of 2019.”


NET SALES

April-June 2018

In April-June 2018, Suominen’s net sales decreased by 2% from the comparison period to EUR 110.0 million (112.0). Measures taken in pricing had a positive impact on the net sales, but were counteracted by the changes in EUR/USD exchange rate and lower sales volumes. The weakening of the USD compared to EUR decreased the net sales by EUR 5.2 million. 

Suominen has two business areas, Convenience and Care. Convenience business area supplies nonwovens as roll goods for a wide range of wiping applications. Care business area manufactures nonwovens for hygiene products and medical applications. Net sales of the Convenience business area amounted to EUR 99.9 million (103.0) and net sales of the Care business area EUR 10.0 million (9.1).


January–June 2018

In January–June 2018, Suominen’s net sales decreased by 4% from the comparison period to EUR 216.6 million (224.9). Measures taken in pricing and in portfolio transformation had a positive impact on the net sales, but were counteracted by the weakening of the US dollar compared with euro, which decreased the net sales by EUR 14.2 million. 

Net sales of the Convenience business area amounted to EUR 197.4 million (204.8) and net sales of the Care business area EUR 19.1 million (20.2).

In January–June, the share of nonwovens for baby wipes declined to 38% (41%) while the share of nonwovens for personal care wipes grew to 23% (20%). Other key applications remained nearly flat compared with the corresponding period last year: share of home care wipes remained at 20%, share of workplace wipes at 9% and medical & hygiene applications at 9%. All nonwovens for wiping products belong to the Convenience business area and nonwovens for hygiene and medical products to the Care business area.

OPERATING PROFIT AND RESULT

April-June 2018

Operating profit declined by 34% from the comparison period and amounted to EUR 2.9 million (4.4), mainly due to tight price competition in flushables. In addition, we still faced some issues with delivery efficiency, mainly deriving from freight constraints in the US. The effect of US dollar exchange rate fluctuation decreased the operating profit by EUR 0.3 million.

Profit before income taxes was EUR 2.4 million (4.1), and profit for the reporting period was EUR 1.8 million (2.1).

January-June 2018

Operating profit decreased by 58% and was EUR 4.5 million (10.6) mainly due to tight price competition in nonwovens for baby wipes and flushable products. In addition, we faced some issues with delivery efficiency. The weakening of the US dollar compared to euro decreased the operating profit by EUR 0.3 million.

Profit before income taxes was EUR 2.1 million (10.2), and profit for the reporting period was EUR 1.4 million (6.4).

FINANCING

The Group’s net interest-bearing liabilities at nominal value amounted to EUR 79.1 million (72.1) at the end of the review period. The gearing ratio was 59.6% (53.7%) and the equity ratio 41.7% (43.0%).

In January–June, net financial expenses were EUR -2.4 million (-0.4), or -1.1% (-0.2%) of net sales. During the first half of 2017 the capitalization of borrowing costs in fixed assets required by IAS 23 standard decreased interest expenses recognized in the statement of profit or loss by EUR 1.6 million. Fluctuations in exchange rates decreased the net financial expenses by EUR 0.2 million. During the comparison period the fluctuations in exchange rates did not have any material effect on the net financial items.

Cash flow from operations in April-June was EUR 10.8 million (10.2) and in January-June EUR 16.0 million (16.3), representing a cash flow per share of EUR 0.28 (0.31). The cash flow from operations in the second quarter of 2018 improved slightly from the corresponding period as we received corporate income tax refunds in the USA. The tax refunds did not have any effect on the second quarter result. In the second quarter the change in working capital was EUR -4.0 million (+0.3).

The slight decline in the cash flow from operations in the first half of the year was mainly due to the lower profit. In addition, more cash was tied up to working capital (EUR 4.7 million, EUR 2.5 million in corresponding period last year). The corporate income tax refunds improved the cash flow from operations.

CAPITAL EXPENDITURE

In January-June, the gross capital expenditure totaled EUR 6.7 million (24.2) and was mainly related to the investment in the group-wide renewal of ICT systems as well as to the growth investment initiative at Suominen’s plant in Green Bay, WI, USA.

Out of Suominen’s eight plants, four are currently operating with the renewed ICT systems as the implementation of the new systems was conducted successfully in the Green Bay, WI, USA plant in the first quarter and in the both Italian plants in the second quarter.

Other investments were mainly for maintenance. Depreciation and amortization for the review period amounted to EUR 10.1 million (9.2).

INFORMATION ON SHARES AND SHARE CAPITAL

Share capital

The number of Suominen’s registered shares was 58,259,219 shares on 30 June 2018, equaling to a share capital of EUR 11,860,056.00.


Share trading and price

The number of Suominen Corporation shares traded on Nasdaq Helsinki from 1 January to 30 June 2018 was 1,688,315 shares, accounting for 2.9% of the average number of shares (excluding treasury shares). The highest price was EUR 4.60, the lowest EUR 3.22 and the volume-weighted average price EUR 3.82. The closing price at the end of review period was EUR 3.40. The market capitalization (excluding treasury shares) was EUR 195.5 million on 30 June 2018.

Treasury shares

On 30 June 2018, Suominen Corporation held 762,970 treasury shares.

The Board of Directors of Suominen Corporation resolved on 6 March 2018 on a directed share issue without payment for the reward payment from Suominen’s Matching Share Plan 2015 and from the Performance Share Plan 2015 (Performance Period 2015‒2017). The number of treasury shares distributed to the participants was 89,568 shares.

In accordance with the resolution by the Annual General Meeting, in total 23,742 shares were transferred to the members of the Board of Directors as their remuneration payable in shares during the reporting period.

The portion of the remuneration of the members of the Board of Directors which shall be paid in shares

The Annual General Meeting held on 15 March 2018 decided that the remuneration payable to the members of the Board remains unchanged. 60% of the annual remuneration is paid in cash and 40% in Suominen Corporation’s shares.

The number of shares forming the remuneration portion which is payable in shares will be determined based on the share value in the stock exchange trading maintained by Nasdaq Helsinki Ltd, calculated as the trade volume weighted average quotation of the share during the one month period immediately following the date on which the Interim Report of January‒March 2018 of the company is published. The shares will be given out of the own shares held by the company by the decision of the Board of Directors by 1 June 2018 at the latest.

Share-based incentive plans for the management and key employees

The Group management and key employees participate the company’s share-based incentive plan. The plans are described in detail in the Financial Statements 2017 and in the Remuneration Statement 2017 of Suominen Corporation, available on the company’s website, www.suominen.fi > Investors > Corporate Governance.

The Board of Directors of Suominen Corporation resolved on 6 March 2018 on a directed share issue without payment for the reward payment from Suominen’s Matching Share Plan 2015 and from the Performance Share Plan 2015 (Performance Period 2015‒2017). The resolution on the directed share issue without payment was based on the authorization granted to the Board of Directors by the Annual General Meeting held on 16 March 2016.

The plans had in total 14 participants. Based on the terms and conditions of the plans and after the deduction of the cash portion of the reward for taxes, the number of shares earned by the participants was 89,568 shares.

ANNUAL GENERAL MEETING

The Annual General Meeting (AGM) of Suominen Corporation was held on 15 March 2018.

The AGM adopted the Financial Statements and the Consolidated Financial Statements for the financial year 2017 and discharged the members of the Board of Directors and the President & CEO from liability for the financial year 2017.

The AGM decided that a return of capital of EUR 0.11 per share will be paid, in total EUR 6.3 million. The decision was in accordance with the proposal by the Board of Directors. 

The AGM decided that the remuneration payable to the members of the Board remains unchanged. The Chair will be paid an annual fee of EUR 60,000, Deputy Chair of the Board an annual fee of EUR 37,500 and other Board members an annual fee of EUR 28,000. Further, the members of the Board will receive a fee of EUR 500 for each meeting of the Board of Directors held in the home country of the respective member and a fee of EUR 1,000 per each meeting of the Board of Directors held elsewhere than in the home country of the respective member. 60% of the remuneration is paid in cash and 40% in Suominen Corporation’s shares. Compensation for expenses is paid in accordance with the company's valid travel policy. The decision was in accordance with the proposal by the Shareholders’ Nomination Board.

The AGM decided that the number of Board members remains unchanged at six (6). Mr. Jan Johansson was re-elected as Chair of the Board of Directors and Mr. Andreas Ahlström, Mr. Risto Anttonen, Mr. Hannu Kasurinen, Ms. Laura Raitio and Ms. Jaana Tuominen were re-elected as members of the Board of Directors. The decisions were in accordance with the proposal by the Shareholders’ Nomination Board.

Ernst & Young Oy, Authorised Public Accountant firm, was re-elected as the auditor of the company for the next term of office in accordance with the Articles of Association. Ernst & Young Oy appointed Mr. Toni Halonen, Authorised Public Accountant, as the principally responsible auditor of the company. The AGM decided that the auditor's fee would be paid according to the invoice accepted by the company. The decisions were in accordance with the proposal of the Board of Directors and the recommendation by the Audit Committee.

The AGM authorized the Board of Directors to decide on the repurchase of the company’s own shares. The decision was in accordance with the proposal by the Board of Directors. The terms and conditions of the authorization are explained later in this half-year financial report.


Constitutive meeting and permanent committees of the Board of Directors

In its organizing meeting held after the AGM, the Board of Directors re-elected Risto Anttonen as Deputy Chair of the Board.

The Board of Directors elected from among its members the members for the Audit Committee and Personnel and Remuneration Committee. Hannu Kasurinen was re-elected as the Chair of the Audit Committee and Andreas Ahlström was re-elected as member. Laura Raitio was elected as a new member to the Audit Committee. Jan Johansson was re-elected as the Chair of the Personnel and Remuneration Committee and Risto Anttonen and Laura Raitio were re-elected as members.

Authorizations of the Board of Directors

The Annual General Meeting (AGM) held on 15 March 2018 authorized the Board of Directors to decide on the repurchase a maximum of 400,000 of the company’s own shares. 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 trading on regulated market organized by Nasdaq Helsinki Ltd at the market price prevailing at the time of acquisition. The shares shall be repurchased and paid in accordance with the rules of Nasdaq Helsinki Ltd and Euroclear Finland Ltd. The shares shall be repurchased to be used in company’s share-based incentive programs, in order to disburse the remuneration of the members of the Board of Directors, for use as consideration in acquisitions related to the company’s business, or to be held by the company, to be conveyed by other means or to be cancelled. The Board of Directors shall decide on other terms and conditions related to the repurchase of the company’s own shares. The repurchase authorization shall be valid until 30 June 2019 and it revokes all earlier authorizations to repurchase company’s own shares.

The AGM held on 16 March 2016 authorized the Board of Directors to decide on issuing new shares and/or conveying the company’s own shares held by the company and/or granting special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Limited Liability Companies Act. New shares may be issued and/or company’s own shares held by the company or its group company may be conveyed at the maximum amount of 5,000,000 shares in aggregate. The maximum number of new shares that may be subscribed and own shares held by the company that may be conveyed by virtue of the options and other special rights granted by the company is 5,000,000 shares in total which number is included in the maximum number stated earlier. The authorization is valid until 30 June 2019. On 30 June 2018, the remaining maximum amount of shares to be conveyed was 4,872,826 shares.

NOTIFICATIONS UNDER CHAPTER 9, SECTION 5 OF THE SECURITIES MARKET ACT

Suominen Corporation received on 26 April 2018 a notification referred to in Chapter 9, Section 5 of the Securities Market Act. According to the notification, the shareholding of TVF TopCo Limited in Suominen Corporation crossed the 5% flagging threshold and was 5.68% of shares and votes in Suominen Corporation. TVF TopCo Limited is ultimately owned by the Triton Value Fund (TVF).


BUSINESS RISKS AND UNCERTAINTIES

The estimate on the development of Suominen’s net sales is partially based on forecasts and delivery plans received from the company’s customers. Changes in these forecasts and plans, resulting from changes in the market conditions or in customers’ inventory levels, may affect Suominen’s net sales.

Suominen’s customer base is fairly concentrated, which adds to the customer-specific risk. This may affect Suominen’s financial result if customers’ purchasing habits become more cautious as a result of a changes in consumption, or as a result of sales losses. In 2017, the Group’s ten largest customers accounted for 63% (63%) of the Group net sales. Long-term contracts are preferred with the largest customers. In practice the customer relationships are long-term and last for several years. Customer-related credit risks are managed in accordance with a risk policy approved by the Board of Directors. Credit limits are confirmed for customers on the basis of credit ratings and customer history. Suominen also uses export credit guarantees and insures against customer risks to a limited extent. 


The relevance of the United States in Suominen’s business operations increases the significance of the exchange rate risk related to USD in the Group’s total exchange risk position. Suominen hedges this foreign exchange position in accordance with its hedging policy.

The risks that are characteristic to South American region, including significant changes in business environment or exchange rates, could have an impact on Suominen’s operations in Brazil.

Suominen purchases significant amounts of pulp- and oil-based raw materials annually. Raw materials are the largest cost item for operations. Rapid changes in the global market prices of raw materials have an impact on the company’s profitability. Suominen’s stocks equal to two to four weeks’ consumption and passing on the price changes of these raw materials to the prices Suominen charges its contract customers takes two to five months. 


Extended interruptions in the supply of Suominen’s main raw materials could disrupt production and have a negative impact on the Group’s overall business operations. As Suominen sources its raw materials from a number of major international suppliers, significant interruptions are unlikely.

Suominen has numerous regional, national and international competitors in its different product groups. There is currently oversupply in some product groups in Suominen’s both principal market regions. Products based on new technologies and imports from countries of lower production costs may reduce Suominen’s competitive edge. If Suominen is not able to compete with an attractive product offering, it may lose some of its market share. Competition may lead to increased pricing pressure on the company’s products.


Suominen continuously invests in its manufacturing facilities. The deployment of the investments may delay from what was planned, the costs of the investments may increase from what has been expected or the investments may create less business benefits than anticipated. The deployment phase of investments may cause temporary interruptions in operations.

Suominen’s operations are dependent on the integrity, security and stable operation of its ICT systems and software as well as on the successful management of cyber risks. If Suominen’s ICT systems and software were to become unusable or significantly impaired for an extended period of time, or the cyber risks are realized, Suominen’s reputation as well as ability to deliver products at the appointed time, order raw materials and handle inventory could be adversely impacted.

There could be a risk of Suominen’s business operations being interrupted due to abrupt and unforeseen events, such as power outages or fire and water damage. Suominen may not be able to control these events through predictive actions, which could lead to interruptions in business. Risks of this type are insured in order to guarantee the continuity of operations. As Suominen has valid damage and business interruption insurance, it is expected that the damage would be compensated and the financial losses caused by the interruption of business would be covered.

Suominen uses certain technologies in its production. In the management’s view, the chosen technologies are competitive and there is no need to make major investments in new technologies. However, it cannot be excluded that the company’s technology choices could prove wrong, and the development of new or substitute technologies would then require investments.

Suominen aims to protect its business against product liability risks through the use of systematic quality assurance processes and products liability insurance. Technology function of the company is responsible for ensuring the underlying safety of the group´s products during their development. Continuous quality control is designed to guarantee product quality during production. Management considers it unlikely that the Group will face significant product liability-related claims, and is unaware of any such claims.


Suominen is subject to corporate income taxes in numerous jurisdictions. Significant judgment is required to determine the total amount of corporate income tax at Group level. There are many transactions and calculations that leave room for uncertainty as to the final amount of the income tax. Tax risks relate also to changes in tax rates or tax legislation or misinterpretations, and materialization of the risks could result in increased payments or sanctions by the tax authorities, which in turn could lead to financial loss. Deferred tax assets included in the statement of financial position require that the deferred tax assets can be recovered against the future taxable income. 


The Group is exposed to several financial risks, such as foreign exchange, interest rate, counterparty, liquidity and credit risks. The Group’s financial risks are managed in line with a policy confirmed by the Board of Directors. The financial risks are described in the note 3 of the Financial Statements.

Suominen performs goodwill impairment testing annually. In impairment testing the recoverable amounts are determined as the value in use, which comprises of the discounted projected future cash flows. Actual cash flows can differ from the discounted projected future cash flows. Uncertainties related to the projected future cash flows include, among others, the long economic useful life of the assets and changes in the forecast sales prices of Suominen’s products, production costs as well as discount rates used in testing. Due to the uncertainty inherent in the future, it is possible that Suominen’s recoverable amounts will be insufficient to cover the carrying amounts of assets, particularly goodwill. If this happens, it will be necessary to recognize an impairment loss, which, when implemented, will weaken the result and equity. Goodwill impairment testing has been described in the consolidated financial statements.

BUSINESS ENVIRONMENT

Suominen’s nonwovens are, for the most part, used in daily consumer goods, such as wet wipes as well as in hygiene and medical products. In these target markets of Suominen, the general economic situation determines the development of consumer demand, even though the demand for consumer goods is not very cyclical in nature. North America and Europe are the largest market areas for Suominen. In addition, the company operates in South American markets. The growth in the demand for nonwovens has typically exceeded the growth of gross domestic product by a couple of percentage points.

In Suominen’s main market areas, Europe and North America, the consumer confidence indices remained strong. Suominen assesses the trend in the demand for its products on the basis of both the general market situation and, above all, on the basis of the framework agreements drawn up with its customers. The new manufacturing capacity that has come on stream has somewhat saturated the markets, primarily in nonwovens for baby wipes and flushables.

At large, the growth in the demand in Suominen’s target markets is expected to continue in 2018, on average, at the pace of 2017.

OUTLOOK FOR 2018

Suominen specifies its outlook and expects that in 2018, its net sales will improve from 2017 and its comparable operating profit will be at the level of 2017. In 2017, Suominen’s net sales amounted to EUR 426.0 million and operating profit to EUR 15.0 million. In financial year 2017 Suominen had no items affecting the comparability of the operating profit. The calculation of comparable operating profit is explained in the disclosures of this release.

ANALYST AND PRESS CONFERENCE

Nina Kopola, President & CEO, and Tapio Engström, CFO, will present the Q2 financial result in Finnish at an analyst and press conference in Helsinki on Friday, 3 August at 11:00 am (EEST). The conference will take place at Suominen’s Helsinki office, address Itämerentori 2. The presentation material will be available after the analyst and press conference at www.suominen.fi

A teleconference and a webcast on the Q2 financial result will be held on 3 August at 3:00 pm (EEST). The conference can be attended by phone at +44 20 3936 2999 (passcode 289666). The conference can be accessed also at www.suominen.fi/webcast. The conference call will be held in English.
A replay of the conference can be accessed at www.suominen.fi/webcast or by phone at +44 20 3936 3001, using passcode 138227.


NEXT FINANCIAL REPORT

Suominen Corporation will publish its Interim Report for January-September 2018 on Thursday 25 October 2018 approximately at 8:00 am (EEST).

SUOMINEN GROUP 1 JANUARY–30 JUNE 2018

The figures in these half-year financial statements are mainly presented in EUR thousands. As a result of rounding differences, the figures presented in the tables do not necessarily add up to total.

This half-year report has not been audited.

This half-year report has been prepared in accordance with the principles defined in IAS 34 Interim Financial Reporting. The principles for preparing the interim report are the same as those used for preparing the consolidated financial statements for 2017, with the exception of the effect of the new accounting standards and interpretations which came into force on 1 January 2018.

The new standards, amendments and interpretations, which have been applied from 1 January 2018 and which have a material effect on Suominen have been disclosed in Suominen’s January-March 2018 Interim Report. Other new or amended standards or interpretations applicable from 1 January 2018 are not material for Suominen Group. Also the effects of the changes in accounting principles on Suominen’s opening balances in the statement of financial position are presented separately in Suominen’s January-March 2018 Interim Report.


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

    Restated
EUR thousand 30.6.2018 30.6.2017 31.12.2017
Assets    
Non-current assets    
Goodwill 15,496 15,496 15,496
Intangible assets 20,111 15,795 17,470
Property, plant and equipment 132,590 140,194 136,649
Loan receivables 3,072 5,836 3,072
Equity instruments 777 777 777
Other non-current receivables 1,317 1,959 1,744
Deferred tax assets 4,681 3,697 5,142
Total non-current assets 178,043 183,753 180,349
    
Current assets    
Inventories 47,290 39,735 44,241
Trade receivables 59,575 59,563 53,934
Loan receivables 4,337 2,550 4,337
Other current receivables 3,630 5,159 4,236
Assets for current tax 672 974 7,703
Cash and cash equivalents 24,480 20,379 27,240
Total current assets 139,984 128,360 141,692
    
Total assets 318,027 312,113 322,040
    
Equity and liabilities    
Equity    
Share capital 11,860 11,860 11,860
Share premium account 24,681 24,681 24,681
Reserve for invested unrestricted equity 81,185 76,262 87,423
Treasury shares -44 -44 -44
Fair value and other reserves 264 398 264
Exchange differences -2,555 2,923 -3,151
Retained earnings 17,241 7,044 15,761
Total equity attributable to owners of the parent 132,631 123,125 136,794
Hybrid bond 10,950
Total equity 132,631 134,074 136,794
    
Liabilities    
Non-current liabilities    
Deferred tax liabilities 14,841 10,726 14,558
Liabilities from defined benefit plans 908 988 984
Other non-current liabilities 17 706 49
Debentures 95,736 75,000 95,192
Other non-current interest-bearing liabilities 116 9,089 162
Total non-current liabilities 111,617 96,510 110,945
    
Current liabilities    
Current interest-bearing liabilities 10,106 16,729 15,118
Liabilities for current tax 321 2,692 32
Trade payables and other current liabilities 63,352 62,108 59,152
Total current liabilities 73,780 81,529 74,302
      
Total liabilities 185,397 178,039 185,247
    
Total equity and liabilities 318,027 312,113 322,040

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

EUR thousand 4-6/2018 4-6/2017 1-6/2018 1-6/2017 1-12/2017
Net sales 109,961 112,002 216,577 224,922 425,996
Cost of goods sold -99,905 -100,122 -198,674 -199,368 -383,839
Gross profit 10,056 11,880 17,903 25,554 42,157
Other operating income 571 587 1,195 936 1,764
Sales and marketing expenses -1,830 -1,951 -3,610 -3,809 -7,262
Research and development -1,001 -1,217 -1,809 -2,481 -4,739
Administration expenses -4,684 -4,936 -9,021 -9,630 -16,861
Other operating expenses -193 27 -191 80 -59
Operating profit 2,919 4,391 4,466 10,649 15,000
Net financial expenses -507 -285 -2,383 -442 -2,570
Profit before income taxes 2,411 4,105 2,083 10,207 12,430
Income taxes -598 -1,988 -642 -3,850 2,048
Profit for the period 1,813 2,117 1,441 6,357 14,478
        
Earnings per share, EUR      
Basic 0.03 0.04 0.03 0.12 0.27
Diluted 0.03 0.04 0.03 0.11 0.25


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR thousand 4-6/
2018
4-6/
2017
1-6/
2018
1-6/
2017
1-12/
2017
      
Profit for the period 1,813 2,117 1,441 6,357 14,478
      
Other comprehensive income:      
Other comprehensive income that will be subsequently reclassified to profit or loss      
Exchange differences 4,210 -9,229 871 -10,522 -17,083
Fair value changes of cash flow hedges 201 209 267
Reclassified to profit or loss -21 -17 13
Reclassified to property, plant and equipment 187 187 -35
Income taxes related to other comprehensive income -530 669 -275 841 1,328
Total 3,680 -8,193 595 -9,302 -15,510
Other comprehensive income that will not be subsequently reclassified to profit or loss      
Remeasurements of defined benefit plans 43 15
Income taxes related to other comprehensive income -12 -4
Total 31 11
      
Total other comprehensive income 3,680 -8,193 595 -9,271 -15,500
      
Total comprehensive income for the period 5,493 -6,075 2,036 -2,915 -1,022


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR thousand Share capital Share premium account Reserve for invested unrestricted equity Treasury shares
Equity 1 January 2018 11,860 24,681 87,423 -44
Effect of changes in IFRS standards
Restated equity 1 January 2018 11,860 24,681 87,423 -44
Profit / loss for the period
Other comprehensive income
Total comprehensive income
Share-based payments
Return of capital -6,322
Conveyance of treasury shares 84
Equity 30 June 2018 11,860 24,681 81,185 -44


EUR thousand Exchange differences Fair value and other reserves Retained earnings Total equity  
Equity 1 January 2018 -3,151 264 15,084 136,117  
Effect of changes in IFRS standards 677 677  
Restated equity 1 January 2018 -3,151 264 15,761 136,794  
Profit / loss for the period 1,441 1,441  
Other comprehensive income 595 594  
Total comprehensive income 595 1,441 2,036  
Share-based payments 39 39  
Return of capital -6,322  
Conveyance of treasury shares 84  
Equity 30 June 2018 -2,555 264 17,241 132,631  
 

 

 

 

EUR thousand
Share capital Share premium account Reserve for invested unrestricted equity Treasury shares Exchange differences
Equity 1 January 2017 11,860 24,681 70,855 -44 12,613
Profit / loss for the period
Other comprehensive income -9,690
Total comprehensive income -9,690
Share-based payments
Dividend distribution
Conveyance of treasury shares 84
Conversion of hybrid bond 5,323
Hybrid bond
Equity 30 June 2017 11,860 24,681 76,262 -44 2,923
EUR thousand Fair value and other reserves Retained earnings Total Hybrid bond Total equity  
Equity 1 January 2017 10 6,324 126,300 16,525 142,824  
Profit / loss for the period 6,357 6,357 6,357  
Other comprehensive income 388 ,31 -9,271 -9,271  
Total comprehensive income 388 6,388 -2,915 -2,915  
Share-based payments 230 230 230  
Dividend distribution -5,585 -5,585 -5,585  
Conveyance of treasury shares 84 84  
Conversion of hybrid bond 5,323 -5,323  
Hybrid bond -313 -313 -252 -564  
Equity 30 June 2017 398 7,044 123,125 10,950 134,074  
EUR thousand Share capital Share premium account Reserve for invested unrestricted equity Treasury shares Exchange differences  
Equity 1 January 2017 11,860 24,681 70,855 -44 12,613  
Profit / loss for the period  
Other comprehensive income -15,764  
Total comprehensive income -15,764  
Share-based payments  
Dividend distribution  
Conveyance of treasury shares 84  
Conversion of hybrid bond 16,484  
Hybrid bond  
Equity 31 December 2017 11,860 24,681 87,423 -44 -3,151  
Effect of changes in IFRS standards  
Restated equity 31 December 2017 11,860 24,681 87,423 -44 -3,151  
                     


EUR thousand Fair value and other reserves Retained earnings Total Hybrid bond Total equity
Equity 1 January 2017 10 6,324 126,300 16,525 142,824
Profit / loss for the period 14,478 14,478 14,478
Other comprehensive income 254 11 -15,500 -15,500
Total comprehensive income 254 14,489 -1,022 -1,022
Share-based payments 338 338 338
Dividend distribution -5,585 -5,585 -5,585
Conveyance of treasury shares 84 84
Conversion of hybrid bond 16,484 -16,484
Hybrid bond -481 -481 -41 -522
Equity 31 December 2017 264 15,084 136,117 136,117
Effect of changes in IFRS standards 677 677 677
Restated equity 31 December 2017 264 15,761 136,794 136,794


CONSOLIDATED STATEMENT OF CASH FLOWS

EUR thousand 1-6/2018 1-6/2017 1-12/2017
      
Cash flow from operations    
Profit for the period 1,441 6,357 14,478
Total adjustments to profit the period 13,767 14,558 21,069
Cash flow before changes in net working capital 15,208 20,915 35,547
Change in net working capital -4,707 -2,476 -8,028
Financial items -1,429 -2,369 -5,575
Income taxes 6,881 252 207
Cash flow from operations 15,952 16,322 22,152
    
Cash flow from investments    
Investments in property, plant and equipment and intangible assets -7,146 -23,135 -33,839
Cash flow from disposed businesses 198 287 287
Sales proceeds from property, plant and equipment and intangible assets 5
Cash flow from investments -6,948 -22,848 -33,548
    
Cash flow from financing    
Drawdown of non-current interest-bearing liabilities 25,730
Drawdown of current interest-bearing liabilities 10,000 25,000
Repayment of current interest-bearing liabilities -5,058 -2,220 -27,263
Repayment in loan receivables   1,550
Tender and issuance costs of the bonds -5,190
Payment of hybrid bond interest -642 -642
Return of capital / dividend distribution -6,322 -5,585 -5,585
Cash flow from financing -11,380 1,552 13,599
    
Change in cash and cash equivalents -2,376 -6,974 2,203
    
Cash and cash equivalents at the beginning of the period 27,240 29,522 29,522
Effect of changes in exchange rates -384 -2,169 -4,485
Change in cash and cash equivalents -2,376 -6,974 2,203
Cash and cash equivalents at the end of the period 24,480 20,379 27,240


KEY RATIOS

  4-6/
2018
4-6/
2017
1-6/
2018
1-6/
2017
1-12/
2017
Change in net sales, % * -1.8 2.9 -3.7 5.7 2.2
Gross profit, as percentage of net sales, % 9.1 10.6 8.3 11.4 9.9
Comparable gross profit, as percentage of net sales, % 9.1 10.6 8.3 11.4 9.9
Operating profit, as percentage of net sales, % 2.7 3.9 2.1 4.7 3.5
Comparable operating profit, as percentage of net sales, % 2.7 3.9 2.1 4.7 3.5
Net financial items, as percentage of net sales, % -0.5 -0.3 -1.1 -0.2 -0.6
Profit before income taxes, as percentage of net sales, % 2.2 3.7 1.0 4.5 2.9
Profit for the period, as percentage of net sales, % 1.6 1.9 0.7 2.9 3.4
Gross capital expenditure, EUR thousand 4,441 12,957 6,677 24,180 37,210
Depreciation and amortization, EUR thousand 5,124 4,556 10,123 9,207 19,349
Return on equity, rolling 12 months, % 7.2 9.5 10.6
Return on invested capital, rolling 12 months, % 4.1 9.7 6.6
Equity ratio, % 41.7 43.0 42.5
Gearing, % 59.6 53.7 59.5
Average number of personnel 670 667 670
Earnings per share, EUR, basic 0.03 0.04 0.03 0.12 0.27
Earnings per share, EUR, diluted 0.03 0.04 0.03 0.11 0.25
Cash flow from operations per share, EUR 0.19 0.19 0.28 0.31 0.39
Equity per share, EUR 2.31 2.53 2.38
Number of shares, end of period, excluding treasury shares 57,496,249 52,918,655 57,382,939
Share price, end of period, EUR 3.40 4.95 4.42
Share price, period low, EUR 3.22 3.86 3.86
Share price, period high, EUR 4.60 5.22 5.22
Volume weighted average price during the period, EUR 3.82 4.47 4.53
Market capitalization, EUR million 195.5 261.9 253.6
Number of traded shares during the period 1,688,315 2,838,587 5,405,584
Number of traded shares during the period, % of average number of shares 2.9 5.6 10.4
      
*  Compared with the corresponding period in the previous year.
31.12.2017 is restated due to application of new IFRS standards and interpretations.

 
    30.6.2018 30.6.2017 31.12.2017
Interest-bearing net debt, EUR thousand      
Non-current interest-bearing liabilities, nominal value    100,846 84,089 100,892
Current interest-bearing liabilities, nominal value    10,106 16,729 15,118
Interest-bearing receivables and cash and cash equivalents     -31,889 -28,765 -34,650
Interest-bearing net debt     79,062 72,053 81,360

CALCULATION OF KEY RATIOS AND ALTERNATIVE PERFORMANCE MEASURES


Key ratios per share are either IFRS key ratios (earnings per share) or required by Ordinance of the Ministry of Finance in Finland or alternative performance measures (cash flow from operations per share).

Some of the other key ratios Suominen publishes are alternative performance measures. An alternative performance measure is a key ratio which has not been defined in IFRS standards. Suominen believes that the use of alternative performance measures provides useful information for example to investors regarding the Group's financial and operating performance and makes it easier to make comparisons between the reporting periods.

The link between the components of the key ratios per share and the consolidated financial statements is presented in the consolidated financial statements of 2017. The link between the components of the alternative performance measures and the consolidated financial statements is presented in Suominen’s Annual Report for 2017.


Calculation of key ratios per share

Earnings per share                                           
                                               

Basic earnings per share (EPS)   Profit for the period adjusted with interest on hybrid bond, net of tax
= Share-issue adjusted average number of shares excluding treasury shares
 
    
    
Diluted earnings per share (EPS)   Profit for the period
= Average diluted share-issue adjusted number of shares excluding treasury shares
 


EUR thousand 30.6.2018 30.6.2017 31.12.2017
Profit for the period 1,441 6,357 14,478
Interest on hybrid bond net of tax -313 -481
Total 1,441 6,044 13,997
    
    
Average share-issue adjusted number of shares 57,441,177 50,892,795 52,145,416
Average diluted share-issue adjusted number of shares excluding treasury shares 57,523,022 57,790,098 57,798,395
    
Earnings per share    
    
EUR      
Basic 0.03 0.12 0.27
Diluted 0.03 0.11 0.25

Cash flow from operations per share
           

Cash flow from operations per share   Cash flow from operations
= Share-issue adjusted number of shares excluding treasury shares, end of reporting period
 


  30.6.2018 30.6.2017 31.12.2017
Cash flow from operations, EUR thousand 15,952 16,322 22,152
Share-issue adjusted number of shares excluding treasury shares, end of reporting period 57,496,249 52,918,655 57,382,939
Cash flow from operations per share, EUR 0.28 0.31 0.39

           
Equity per share

Equity per share   Total equity
= Share-issue adjusted number of shares excluding treasury shares, end of reporting period
 


    restated
  30.6.2018 30.6.2017 31.12.2017
Total equity, EUR thousand 132,631 134,074 136,794
Share-issue adjusted number of shares excluding treasury shares, end of reporting period 57,496,249 52,918,655 57,382,939
Equity per share, EUR 2.31 2.53 2.38

                                                                                  

Market capitalization

Market capitalization = Number of shares at the end of reporting period excluding treasury shares x share price at the end of period  
    30.6.2018 30.6.2017 31.12.2017
Number of shares at the end of reporting period excluding treasury shares   57,496,249 52,918,655 57,382,939
Share price at end of the period, EUR 3.40 4.95 4.42
Market capitalization, EUR million   195.5 261.9 253.6
        

Share turnover

Share turnover = The proportion of number of shares traded during the period to weighted average number of shares excluding treasury shares


    30.6.2018 30.6.2017 31.12.2017
Number of shares traded during the period   1,688,315 2,838,587 5 405 584
Average number of shares excluding treasury shares 57 441 177 50,892,795 52,145,416
Share turnover, %   2.9 5.6 10.4


Calculation of key ratios and alternative performance measures

Operating profit and comparable operating profit

Operating profit (EBIT) = Profit before income taxes + net financial expenses
     
Comparable operating profit (EBIT) = Profit before income taxes + net financial expenses, adjusted with items affecting comparability

In order to improve the comparability of result between reporting periods, Suominen presents comparable operating profit as an alternative performance measure. Operating profit is adjusted with material items that are considered to affect comparability between reporting periods. These items include, among others, impairment losses or reversals of impairment losses, gains or losses from the sales of property, plant and equipment or intangible assets or other assets and restructuring costs. Suominen did not have any items affecting comparability in 2018 or 2017.

EBITDA

EBITDA = EBIT + depreciation, amortization and impairment losses


EUR thousand   30.6.2018 30.6.2017 31.12.2017
Operating profit   4,466 10,649 15,000
+ Depreciation, amortization and impairment losses 10,123 9,207 19,349
EBITDA   14,589 19,856 34,349

Gross capital expenditure

EUR thousand   30.6.2018 30.6.2017 31.12.2017
Increases in intangible assets   3,664 3,104 6,027
Increases in property, plant and equipment 3,013 21,076 31,183
Gross capital expenditure   6,677 24,180 37,210

Interest-bearing net debt

It is the opinion of Suominen that presenting interest-bearing liabilities not only at amortized cost but also at nominal value gives relevant additional information to the investors.

Interest-bearing net debt = Interest-bearing liabilities at nominal value - interest-bearing receivables - cash and cash equivalents


EUR thousand   30.6.2018 30.6.2017 31.12.2017
Interest-bearing liabilities   105,958 100,818 110,472
Tender and issuance costs of the debentures   4,994 5,538
Interest bearing receivables   -7,409 -8,386 -7,409
Cash and cash equivalents -24 480 -20,379 -27,240
Interest-bearing net debt   79,062 72,053 81,361
     
Interest-bearing liabilities   105,958 100,818 110,472
Tender and issuance costs of the debentures   4,994 5,538
Nominal value of interest-bearing liabilities   110,952 100,818 110,472

Return on equity (ROE), %

Return on equity (ROE), % = Profit for the reporting period (rolling 12 months) x 100
   Total equity (quarterly average)


    restated
EUR thousand 30.6.2018 30.6.2017 31.12.2017
Profit for the reporting period (rolling 12 months) 9,562 12,930 14,478
    
Total equity 30 June 2017 / 30 June 2016 / 31 December 2016 134,074 130,712 142,824
Total equity 30 September 2017 / 30 September 2016 / 31 March 2017 132,564 135,186 139,902
Total equity 31 December 2017 / 31 December 2016 / 30 June 2017 136,794 142,824 134,074
Total equity 31 March 2018 / 31 March 2017 / 30 September 2017 126,866 139,902 132,564
Total equity 30 June 2018 / 30 June 2017 / 31 December 2017 132,631 134,074 136,794
Average 132,586 136,540 137,232
    
Return on equity (ROE), % 7.2 9.5 10.6

                  

Invested capital

Invested capital = Total equity + interest-bearing liabilities


    restated
EUR thousand 30.6.2018 30.6.2017 31.12.2017
Total equity 132,631 134,074 136,794
Interest-bearing liabilities 105,958 100,818 110,472
Invested capital 238,589 234,892 247,266

Return on invested capital (ROI), %

Return on invested capital (ROI), % = Operating profit + financial income (rolling 12 months) x 100
   Invested capital, quarterly average


    restated
EUR thousand 30.6.2018 30.6.2017 31.12.2017
Operating profit (rolling 12 months) 8,817 22,067 15,000
Financial income (rolling 12 months) 780 761 767
Total 9,597 22,828 15,766
    
Invested capital 30 June 2017 / 30 June 2016 / 31 December 2016 234,892 227,594 237,321
Invested capital 30 September 2017 / 30 September 2016 / 31 March 2017 229,735 228,648 244,103
Invested capital 31 December 2017 / 31 December 2016 / 30 June 2017 247,266 237,321 234,892
Invested capital 31 March 2018 / 31 March 2017 / 30 September 2017 232,580 244,103 229,735
Invested capital 30 June 2018 / 30 June 2017 / 31 December 2017 238,589 234,892 247,266
Average 236,613 234,512 238,664
    
Return on invested capital (ROI), % 4.1 9.7 6.6

Equity ratio, %

Equity ratio, % = Total equity x 100  
   Total assets - advances received  


    restated
EUR thousand 30.6.2018 30.6.2017 31.12.2017
Total equity 132,631 134,074 136,794
    
Total assets 318,027 312,113 322,040
Advances received -51 -21 -8
  317,977 312,092 322,033
    
Equity ratio, % 41.7 43.0 42.5


Gearing, %

Gearing, % = Interest-bearing net debt x 100  
   Total equity


     restated
EUR thousand   30.6.2018 30.6.2017 31.12.2017
Interest-bearing net debt   79,062 72,053 81,361
Total equity   132,631 134,074 136,794
Gearing, %   59.6 53.7 59.5

NET SALES BY GEOGRAPHICAL MARKET AREA

EUR thousand 1-6/2018 1-6/2017 1-12/2017
Finland 1,349 1,288 2,510
Rest of Europe 80,177 81,655 160,817
North and South America 130,531 136,163 252,176
Rest of the world 4,521 5,817 10,494
Total 216,577 224,922 425,996

QUARTERLY SALES DEVELOPMENT BY BUSINESS AREA

  2018 2017
EUR thousand 4-6 1-3 10-12 7-9 4-6 1-3
Convenience 99,947 97,481 90,737 92,999 102,976 101,850
Care 9,962 9,152 8,031 9,294 9,072 11,084
Unallocated exchange differences 52 -17 -74 87 -46 -14
Total 109,961 106,616 98,694 102,380 112,002 112,920
         

QUARTERLY DEVELOPMENT

  2018 2017
EUR thousand 4-6 1-3 10-12 7-9 4-6 1-3
Net sales 109,961 106,616 98,694 102,380 112,002 112,920
Comparable operating profit 2,919 1,548 -267 4,618 4,391 6,258
as % of net sales 2.7 1.5 -0.3 4.5 3.9 5.5
Items affecting comparability
Operating profit 2,919 1,548 -267 4,618 4,391 6,258
as % of net sales 2.7 1.5 -0.3 4.5 3.9 5.5
Net financial items -507 -1,876 -988 -1,139 -285 -157
Profit before income taxes 2,411 -328 -1,256 3,478 4,105 6,102
as % of net sales 2.2 -0.3 -1.3 3.4 3.7 5.4


RELATED PARTY INFORMATION

The related parties of Suominen include the members of the Board of Directors, President & CEO and the members of the Corporate Executive Team as well as their family members and their controlled companies. In addition, shareholders who have a significant influence in Suominen through share ownership are included in related parties. Suominen has no associated companies.

In its transactions with related parties Suominen follows the same commercial terms as in transactions with third parties.

The Annual General Meeting held on 15 March 2018 resolved that 40% of the annual remuneration for the Board of Directors is paid in Suominen Corporation’s shares. The number of shares transferred to the members of the Board of Directors as their remuneration payable in shares for 2018 was 23,742 shares. The shares were transferred on 1 June 2018 and the value of the transferred shares totaled EUR 83,788, or approximately EUR 3.53 per share.

Other salaries paid to the related parties, excluding share-based payments, during the first half of 2018 amounted to EUR 861 thousand, obligatory pension payments to EUR 88 thousand, voluntary pension payments to EUR 60 thousand and accruals based on the non-vested share-based incentive plans were EUR 276 thousand.

During the review period in total 70,066 shares in Suominen were transferred to related parties in accordance with the terms of the vested share-based incentive plans. In total 14,182 shares were transferred to the President & CEO and 55,884 shares to other members of the Corporate Executive Team. In accordance with the terms of plan, part of the reward was a cash payment to cover related income taxes. The fair value of the shares and the cash part of the reward was EUR 545 thousand at the date when the shares were transferred.



CHANGES IN PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

  30.6.2018 30.6.2017 31.12.2017
EUR thousands Property, plant and equipment Intangible assets Property, plant and equipment Intangible assets Property, plant and equipment Intangible assets
Carrying amount at the beginning of the period 136,649 17,470 135,510 14,133 135,510 14,133
Capital expenditure 3,013 3,664 21,076 3,104 31,183 6,027
Disposals -36 -36
Depreciation, amortization and impairment losses -9,135 -988 -7,929 -1,278 -16,857 -2,493
Exchange differences and other changes 2,063 -35 -8,463 -129 -13,187 -161
Carrying amount at the end of the period 132,591 20,111 140,195 15,795 136,649 17,470


Goodwill is not included in intangible assets.

CHANGES IN INTEREST-BEARING LIABILITIES

EUR thousand 1-6/
2018
1-6/
2017
1-12/
2017
Total interest-bearing liabilities at the beginning of the period 110,472 94,497 94,497
    
Current liabilities at the beginning of the period 15,118 7,923 7,923
Repayment of current liabilities, cash flow items -5,058 -2,220 -27,264
Drawdown of current liabilities, cash flow items 10,000 25,000
Reclassification from non-current liabilities 46 1,568 11,412
Exchange rate difference -543 -1,953
Current liabilities at the end of the period 10,106 16,728 15,118
    
Non-current liabilities at the beginning of the period 162 11,574 11,574
Reclassification to current liabilities -46 -1,568 -11,412
Exchange rate difference -917
Non-current liabilities at the end of the period 116 9,089 162
    
Debentures at the beginning of the period 95,192 75,000 75,000
Issuance of the new debenture bond, cash flow items 25,730
Periodization of debenture to amortized cost, non-cash flow items 544 -348
Tender and issuance costs of the debentures, cash flow items -5,190
Debentures at the end of the period 95,736 75,000 95,192
    
Total interest-bearing liabilities at the end of the period 105,958 100,817 110,472

CONTINGENT LIABILITIES

EUR thousands 30.6.2018   30.6.2017 31.12.2017
         
Other commitments        
Operating leases 15,876   8,735 8,614
Contractual commitments to acquire property, plant and equipment 2,255   2,620 86
         
Guarantees        
On own behalf 10,880   12,322 9,865
Other own commitments 3,178   3,780 3,484

 Total                                                14,058                 16,103              13,349


NOMINAL AND FAIR VALUES OF DERIVATIVE INSTRUMENTS

  30.6.2018 30.6.2017 31.12.2017
EUR thousand Nominal value Fair
value
Nominal
value
Fair
value
Nominal
value
Fair
value
Currency forward contracts           
  Hedge accounting applied 1,977 111
  Hedge accounting not applied 12,524 -37 2,892 19 1,334 24
Electricity derivatives           
  Hedge accounting applied 300 -4

FINANCIAL ASSETS BY CATEGORY

a. Fair value through profit or loss
b. Financial assets at amortized cost
c. Financial assets at fair value through other comprehensive income
d. Derivatives, hedge accounting applied
e. Carrying amount
f. Fair value


  Classification
EUR thousand a. b. c. d. e. f.
Equity instruments 347 429 777 777
Other non-current receivables
Loan receivables 4,337 3,072 7,409 7,409
Trade receivables 59,575 59,575 59,575
Derivatives
Interest and other financial receivables 847 847 847
Cash and cash equivalents 24,480 24,480 24,480
Total 30.6.2018 4,685 87,973 429 93,087 93,087


EUR thousand a. b. c. d. e. f.
Equity instruments 347 429 777 777
Other non-current receivables 214 214 214
Loan receivables 4,337 3,072 7,409 7,409
Trade receivables 53,934 53,934 53,934
Derivatives 24 24 24
Interest and other financial receivables 670 670 670
Cash and cash equivalents 27,240 27,240 27,240
Total 31.12.2017 4,923 84,916 429 90,268 90,268

The figures for 31.12.2017 have been reclassified and restated to reflect the effects of applying IFRS 9 and IFRS 15.

Principles in estimating fair value of financial assets for 2018 are the same as those used for preparing the consolidated financial statements for 2017 with the exception of certain loan receivables, which are under IFRS 9 measured at fair value through profit and loss (previously at amortized cost).


FINANCIAL LIABILITIES

  30.6.2018   31.12.2017  
EUR thousand Carrying amount Fair value Nominal value Carrying amount Fair value Nominal value
Non-current financial liabilities       
       
Debentures 95,736 102,313 100,730 95,192 102,647 100,730
Finance lease liabilities 116 116 116 162 162 162
Total non-current financial liabilities 95,852 102,429 100,846 95,354 102,809 100,892
       
Current financial liabilities       
       
Current part of non-current loans from financial institutions and current loans from financial institutions 10,000 10,000 10,000 15,000 15,000 15,000
Finance lease liabilities 106 106 106 118 118 118
Derivatives, hedge accounting not applied 37 37 37
Interest accruals 1,808 1,808 1,808 736 736 736
Other current liabilities 344 344 344 301 301 301
Trade payables 53,870 53,870 53,870 52,145 52,145 52,145
Total current financial liabilities 66,164 66,164 66,164 68,300 68,300 68,300
       
Total 162,016 168,593 167,010 163,654 171,109 169,192
        


Principles in estimating fair value for financial liabilities for 2018 are the same as those used for preparing the consolidated financial statements for 2017.

FAIR VALUE MEASUREMENT HIERARCHY

EUR thousands Level 1 Level 2 Level 3
Financial assets and liabilities at fair value    
Loan receivables 4,337
Equity instruments 777
Total 5,114
    
Derivatives at fair value    
Currency forward contracts, liabilities -37
Total -37

Principles in estimating fair value of financial assets and their hierarchies for 2018 are the same as those used for preparing the consolidated financial statements for 2017 with the exception of certain loan receivables, which are under IFRS 9 measured at fair value through profit and loss (previously at amortized cost). There were no transfers in the fair value measurement hierarchy levels during the reporting period.   

RESTATEMENT OF PREVIOUSLY PUBLISHED FIGURES

Restatement of previously published figures is presented in the Interim report for January-March 2018.

SUOMINEN CORPORATION
Board of Directors



For additional information, please contact:
Nina Kopola, President & CEO, tel. +358 (0)10 214 300
Tapio Engström, Senior Vice President and CFO, tel. +358 (0)10 214 300

Suominen in brief

Suominen manufactures nonwovens as roll goods for wipes as well as for medical and hygiene products. The end products made of Suominen’s nonwovens – wet wipes, feminine care products and swabs, for instance – bring added value to the daily life of consumers worldwide. Suominen is the global market leader in nonwovens for wipes and employs over 650 people in Europe and in the Americas. Suominen’s net sales in 2017 amounted to EUR 426.0 million and operating profit to EUR 15.0 million. The Suominen share (SUY1V) is listed in Nasdaq Helsinki Stock Exchange (Mid Cap). Read more at www.suominen.fi.


Distribution:
Nasdaq Helsinki
Main media
www.suominen.fi

Attachment

01-Suominen-Corporation-Interim-Report-Q2-2018.pdf

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