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Suominen Corporation’s Interim Report for January 1 – September 30, 2020: Strong performance continued

Suominen Oyj
·52-min read

Suominen Corporation Interim Report October 27, 2020 at 9:30 a.m. (EET)

Suominen Corporation’s Interim Report for January 1 – September 30, 2020:

Strong performance continued

KEY FIGURES

7-9/

7-9/

1-9/

1-9/

1-12/

2020

2019

2020

2019

2019

Net sales, EUR million

115.4

103.4

347.8

317.0

411.4

EBITDA *

18.1

7.8

47.4

26.2

33.7

EBITDA, %

15.7

7.6

13.6

8.3

8.2

Comparable operating profit, EUR million

12.9

1.1

31.0

6.7

8.1

Comparable operating profit, %

11.2

1.1

8.9

2.1

2.0

Operating profit, EUR million

12.9

1.1

31.0

6.7

8.1

Profit for the period, EUR million

10.9

-0.1

22.8

1.4

0.2

Cash flow from operations, EUR million

20.1

17.4

39.1

24.2

29.9

Cash flow from operations per share, EUR

0.35

0.30

0.68

0.42

0.52

Earnings per share, basic, EUR

0.19

0.00

0.40

0.02

0.00

Return on invested capital, rolling 12 months, %

13.8

3.0

3.7

Gearing, %

29.9

52.1

50.7

*2019 EBITDA restated.


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

July­–September 2020 in brief:

- Net sales increased 12% from the corresponding period of 2019 and were EUR 115.4 million (103.4)
- Operating profit increased significantly and was EUR 12.9 million (1.1)
- Cash flow from operations improved and was EUR 20.1 million (17.4)

January–September 2020 in brief:

- Net sales increased 10% from the corresponding period of 2019 and were EU 347.8 million (317.0)
- Operating profit increased significantly and was EUR 31.0 million (6.7)
- Cash flow from operations improved and was EUR 39.1 million (24.2)

Outlook for 2020 unchanged

Suominen reiterates the outlook presented on June 17, 2020, in which Suominen expects that in 2020 its comparable operating profit will improve significantly from 2019. In 2019, Suominen’s operating profit amounted to EUR 8.1 million. In financial years 2020 and 2019 Suominen had no items affecting the comparability of the operating profit.

Petri Helsky, President & CEO:


“Suominen achieved again a record high quarterly operating profit in the third quarter. Our operating profit increased to EUR 12.9 million (1.1) due to higher production and sales volumes and margin improvement through favorable raw material costs and improved efficiency. Development was positive at all sites, with also our variable cost optimization program continuing to yield results.

Our net sales increased by 12% and amounted to EUR 115.4 million (103.4). Sales volumes increased but sales prices decreased following the lower raw material prices. Demand for wipes continued on a high level driven by the COVID-19 pandemic. Currencies impacted net sales by EUR -5.6 million.

The operating environment continued to be marked by the COVID-19 pandemic. Our primary focus continues to be to safeguard the health and safety of our employees and to maintain business continuity. We also ensured our financial position and liquidity by renewing our revolving credit facility in July.

The pandemic increased sales volumes in all our markets. We expect the higher demand to continue at least in the fourth quarter and early 2021. However, our sales in December are expected to be impacted negatively by the holiday season, as usual. In the longer term the pandemic may lead to a continued increase in demand for nonwovens for cleaning and disinfection products.

In August, we announced that we will increase our spunlace capacity in Europe by upgrading and restarting one of our existing production lines in Cressa, Italy. This investment will strengthen our capabilities in Europe and it is made in line with our strategy aiming for growth.

In September, we published our new sustainability targets and KPIs. Our sustainability agenda has four themes, People and safety, Sustainable nonwovens, Low-impact manufacturing and Corporate Citizenship and now we have ambitious targets for each of them.

During the quarter, we launched two new sustainable products: BIOLACE® Pure and BIOLACE® Combo. Both of these BIOLACE® products are made of renewable raw materials and both are biodegradable and compostable. BIOLACE® Pure is designed to be used in wipes and BIOLACE® Combo in absorbent hygiene products. Our frontrunner status in nonwovens innovation was recognized also by Rockline, one of our major customers, who granted us their Supplier Innovation Award 2020, citing our novel sustainable product development.

Our financial performance continued strong in the third quarter. Going forward we continue to ensure the health of our employees, serve and support our customers, run our operations efficiently and implement our strategy.”

NET SALES

July–September 2020

In July–September 2020, Suominen’s net sales improved from the comparison period by 12% to EUR 115.4 million (103.4). Currencies impacted net sales by EUR -5.6 million.

Suominen has two business areas, Americas and Europe. Net sales of the Americas business area amounted to EUR 71.9 million (66.2) and net sales of the Europe business area EUR 43.5 million (37.2).


January–September 2020

In January–September 2020, Suominen’s net sales improved from the comparison period by 10% and amounted to EUR 347.8 million (317.0). Currencies impacted net sales by EUR -4.4 million.

Net sales of the Americas business area amounted to EUR 222.3 million (199.5) and net sales of the Europe business area to EUR 125.6 million (117.5).

OPERATING PROFIT AND RESULT

July–September 2020

Operating profit improved significantly from the comparison period and amounted to EUR 12.9 million (1.1). Currencies impacted operating profit by EUR -0.2 million.

Profit before income taxes was EUR 11.1 million (0.0), and profit for the reporting period was EUR 10.9 million (-0.1). Income taxes for the period, EUR -0.3 million (-0.1), were impacted by recognition of additional deferred tax assets from previous years’ losses as the possibility to utilize the losses has increased.

January–September 2020

Operating profit increased significantly and was EUR 31.0 million (6.7). Currencies impacted operating profit by EUR -1.5 million.

Profit before income taxes was EUR 25.4 million (2.7), and profit for the reporting period was EUR 22.8 million (1.4).

Income taxes for the period, EUR -2.6 million (-1.2), were impacted by recognition of additional deferred tax assets from previous years’ losses as the possibility to utilize the losses has increased. The corporate income taxes were also positively impacted in the first quarter by the US tax reliefs enacted as a result of the COVID-19 pandemic.



FINANCING

The Group’s net interest-bearing liabilities at nominal value amounted to EUR 43.1 million (71.3) at the end of the review period. The gearing ratio was 29.9% (52.1%) and the equity ratio 46.0% (42.4%).

In January–September, net financial expenses were EUR -5.5 million (-4.1), or -1.6% (-1.3%) of net sales. Fluctuations in exchange rates increased the net financial expenses by EUR 1.6 million (in 2019, decreased by EUR 0.5 million). The net financial expenses include a bad debt provision based on expected credit losses of loan receivables totaling EUR -0.6 million and a fair value change of assets of EUR +0.3 million.

Cash flow from operations in July–September was EUR 20.1 million (17.4) and in January–September EUR 39.1 million (24.2), representing a cash flow per share of EUR 0.68 (0.42). The improvement in the cash flow from operations for January–September was mainly driven by better result.

In the third quarter the change in net working capital was positive by EUR 6.4 million (+10.4).

The change in net working capital was EUR -2.3 million negative in January–September 2020 when in the corresponding period last year the change in net working capital was EUR 0.6 million positive.

On July 13, 2020 Suominen announced that it had entered into a new single-currency syndicated revolving credit facility agreement of EUR 100 million with a maturity of three years with two one-year extension options. The lenders for the facility are Danske Bank A/S, Finland Branch and Nordea. The new credit facility includes leverage ratio and gearing as financial covenants. The margin of the facility will increase or decrease dependent on Suominen meeting two sustainability key performance indicators (“KPI”), namely:

  • Increase in the sales of sustainable products

  • Reduction of greenhouse gas emissions

The new credit facility replaced the EUR 100 million syndicated revolving credit facility agreement provided by Nordea and Svenska Handelsbanken AB (publ), Branch Operation in Finland as the lenders.

CAPITAL EXPENDITURE

Suominen announced in August that it increases its spunlace capacity in Europe by upgrading and restarting one of its existing production lines in Cressa, Italy. The investment will strengthen Suominen’s capabilities in Europe and it is made in line with the strategy aiming for growth. The total value of the investment is approx. EUR 8 million and it will be finalized during the second half of 2021.

In January-September, the gross capital expenditure totaled EUR 4.9 million (8.6) and the largest items were related to the growth investment initiatives in Italy. Other investments were mainly for maintenance. Depreciation and amortization for the review period amounted to EUR 16.4 million (19.5).

IMPACTS OF THE COVID-19 PANDEMIC ON SUOMINEN

The health and safety of Suominen’s employees is a key priority. Suominen has secured the health and safety of its employees by various measures and is closely monitoring the COVID-19 situation. Thanks to our proactive approach, there has been a limited impact on our ability to serve our customers and run our operations so far.

As a nonwovens manufacturer Suominen is an integral part of the supply chain making disinfecting and cleaning products, facemasks and protective clothing available to everyone around the world. The authorities have classified our nonwovens production as essential in fighting the pandemic in the jurisdictions where other business activities were shut down.

The pandemic has increased demand for our products in all our markets and the higher demand is expected to continue at least in the fourth quarter and early 2021. In the longer term the COVID-19 pandemic may lead to a continued increase in demand for nonwovens for cleaning and disinfection products.

Both Suominen’s financial position and cash flow have remained strong throughout the pandemic.

Risks related to COVID-19 are described in the short-term risk and uncertainties section.

PROGRESS IN SUSTAINABILITY

We published our concrete sustainability targets and KPIs in September 2020.

We have strong focus on safety and accident prevention, and our long-term target is to have zero lost-time accidents. There were no lost-time accidents (LTA) in the third quarter (2 in Q3/2019), in January-September 2020 one lost-time accident occurred at Suominen sites (4 in Q1-Q3/2019). Increasing employee engagement is another of our key people-related targets. Our global employee engagement survey was launched in early October and the results will be used to create concrete action plans in order to systematically develop our employee engagement and performance in the future.

We are committed to continuously improving our production efficiency and the efficient utilization of natural resources. Our target for 2025 is to reduce our energy consumption, greenhouse gas emissions, water consumption and waste to landfill by 20% per ton of product compared to the base year of 2019. We have now defined concrete action plans and timelines to reach these targets.

Regarding sustainable products, our target is to increase their sales by 50% by 2025 and to have over 10 sustainable product launches per year. During the quarter, we launched two new sustainable products: BIOLACE® Pure and BIOLACE® Combo. Both of these BIOLACE® products are made of renewable raw materials and both are biodegradable and compostable. BIOLACE® Pure is designed to be used in wipes and BIOLACE® Combo in absorbent hygiene products.

In the Corporate citizenship area, we have renewed our Code of Conduct during the autumn and will publish it later this year. A new mandatory Code of Conduct training program for all employees will be launched in 2021.

INFORMATION ON SHARES AND SHARE CAPITAL

Share capital

The number of Suominen’s registered shares was 58,259,219 shares on September 30, 2020, 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 January 1 to September 30, 2020 was 6,483,441 shares, accounting for 11.3% of the average number of shares (excluding treasury shares). The highest price was EUR 5.36, the lowest EUR 2.00 and the volume-weighted average price EUR 3.66. The closing price at the end of review period was EUR 4.95. The market capitalization (excluding treasury shares) was EUR 285.0 million on September 30, 2020.

Treasury shares

On September 30, 2020, Suominen Corporation held 690,878 treasury shares.

In accordance with the resolution by the Annual General Meeting, in total 29,121 shares were transferred to the members of the Board of Directors as their remuneration payable in shares in May.

In accordance with the matching share-based payment program, 9,352 shares were transferred to the participants of the program in September.

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 March 19, 2020 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 was 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 2020 of the company is published. The shares were given out of the treasury shares held by the company by the decision of the Board of Directors on May 28, 2020.

Share-based incentive plans for the management and key employees

The Group management and key employees participate in the company’s share-based incentive plan. The earlier plans are described in detail in the Financial Statements 2019 and in the Remuneration Statement 2019 of Suominen Corporation, available on the company’s website www.suominen.fi.

On December 11, 2017 the Board of Directors approved a share-based incentive plan for the Group management and key employees. The aim of the plan is to combine the objectives of the shareholders and the persons participating in the plan in order to increase the value of the Company in long-term, to build loyalty to the company and to offer them competitive reward plans based on earning and accumulating the Company’s shares. The plan includes three 3-year performance periods, calendar years 2018-2020, 2019-2021 and 2020-2022.

Performance Share Plan performance periods

Period

2018-2020

2019-2021

2020-2022

Incentive based on

Total Shareholder Return (TSR) and EBIT %

Total Shareholder Return (TSR)

Total Shareholder Return (TSR)

Potential reward payment

Will be paid partly in Suominen shares and partly in cash in spring 2021

Will be paid partly in Suominen shares and partly in cash in spring 2022

Will be paid partly in Suominen shares and partly in cash in spring 2023

Participants

Approx. 20 people

Approx. 20 people

Approx. 20 people

Maximum number of shares

502,000

729,000

893,000

The President & CEO of the Company must hold 50% of the net number of shares given on the basis of the plan, as long as his or her shareholding in total corresponds to the value of his or her annual gross salary. A member of the Executive Team must hold 50% of the net number of shares given on the basis of the plan, as long as his or her shareholding in total corresponds to the value of half of his or her annual gross salary. Such number of shares must be held as long as the participant’s employment or service in a group company continues.

Matching Restricted Share Plan 2019-2021

The Board of Directors of Suominen Corporation approved on June 4, 2019 a Matching Restricted Share Plan for selected key employees in the Suominen Group. The prerequisite for receiving a reward from the plan is that a participant acquires the company’s shares, amounting to the number resolved by the Board.

If the prerequisites set for a participant have been fulfilled and his or her employment or service in a company belonging to the Suominen Group is in force at the time of the reward payment, he or she will receive matching shares as a reward.

The plan includes vesting periods, the duration of which is resolved by the Board. The potential reward will be paid partly in shares and partly in cash after a vesting period. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the plan participants.

The prerequisite for reward payment is that a participant’s employment or service is in force upon reward payment. The plan rewards to be allocated in 2019–2021 will amount to a maximum total of 200,000 Suominen Corporation shares including also the proportion to be paid in cash.

The first vesting period of the matching restricted share plan ended in September and in total 9,352 shares were transferred to the participants.

ANNUAL GENERAL MEETING

The Annual General Meeting (AGM) of Suominen Corporation was held on March 19, 2020.

The AGM adopted the Financial Statements and the Consolidated Financial Statements for the financial year 2019 and discharged the members of the Board of Directors and the President & CEO from liability for the financial year 2019. The AGM approved the Remuneration Policy for the governing bodies.

The AGM decided, in accordance with the proposal by the Board of Directors, that a dividend of EUR 0.05 per share will be paid.

The AGM confirmed the remuneration of the Board of Directors. The Chair will be paid an annual fee of EUR 66,000 and the Deputy Chair and other Board members an annual fee of EUR 31,000. Chair of the Audit Committee will be paid an additional fee of EUR 10,000. Further, the members of the Board will receive a fee for each Board and Committee meeting as follows: EUR 500 for each meeting held in the home country of the respective member, EUR 1,000 for each meeting held elsewhere than in the home country of the respective member and EUR 250 for each meeting held as telephone conference.
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 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, Ms. Sari Pajari and Ms. Laura Raitio were re-elected as members of the Board. Mr. Björn Borgman and Ms. Nina Linander were elected as new members of the 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 authorized the Board of Directors to decide on the repurchase of the company’s own shares and to resolve on the issuance of shares and granting of options and the issuance of special rights entitling to shares. The terms and conditions of the authorization are explained later in this interim report.

Suominen published a stock exchange release on March 19, 2020 concerning the resolutions of the Annual General Meeting and the organizing meeting of the Board of Directors. The stock exchange release and the meeting materials can be viewed on Suominen’s website at www.suominen.fi.

In compliance with the resolution of the Annual General Meeting, on April 3, 2020 Suominen paid out dividends of EUR 2.9 million for 2019, corresponding to EUR 0.05 per share.

Organizing meeting and permanent committees of the Board of Directors

In its organizing meeting held after the AGM, the Board of Directors elected Andreas Ahlström 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. Nina Linander was elected as the Chair of the Audit Committee and Andreas Ahlström and Laura Raitio were re-elected as members. Jan Johansson was re-elected as the Chair of the Personnel and Remuneration Committee and Sari Pajari was re-elected as a member. Björn Borgman was elected as a new member to the Personnel and Remuneration Committee.

Authorizations of the Board of Directors

The Annual General Meeting (AGM) held on March 19, 2020 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 June 30, 2021 and it revokes all earlier authorizations to repurchase company’s own shares.

The Annual General Meeting (AGM) held on March 19, 2020 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 options and other special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act. New shares may be issued, and the company’s own shares may be conveyed to the company’s shareholders in proportion to their current shareholdings in the company; or by waiving the shareholder’s pre-emption right, through a directed share issue if the company has a weighty financial reason to do so, such as, for example, using the shares as consideration in possible acquisitions or other arrangements related to the company’s business, as financing for investments, using shares as part of the company’s incentive program or using the shares for disbursing the portion of the Board members’ remuneration that is to be paid in shares. The new shares may also be issued without payment to the company itself. 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 Board of Directors may grant options and other special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act, which carry the right to receive against payment new shares or own shares held by the company. The right may also be granted to the company’s creditor in such a manner that the right is granted on condition that the creditor’s receivable is used to set off the subscription price (“Convertible Bond”). However, options and other special rights referred to in Chapter 10, Section 1 of the Companies Act cannot be granted as part of the company’s remuneration plan.


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 above.


The authorizations shall revoke all earlier authorizations regarding share issue and issuance of special rights entitling to shares. The Board of Directors shall decide on all other terms and conditions related to the authorizations. The authorizations shall be valid until June 30, 2021.

NOTIFICATIONS UNDER CHAPTER 9, SECTION 5 OF THE SECURITIES MARKET ACT
During the review period Suominen received no notifications under Chapter 9, Section 5 of the Securities Market Act.

NOMINATION BOARD

Suominen’s three largest registered shareholders AC Invest Two B.V., Oy Etra Invest Ab and Varma Mutual Pension Insurance Company have nominated the following members to the Shareholders’ Nomination Board:

  • Lasse Heinonen, President & CEO of Ahlström Capital Oy, as a member appointed by AC Invest Two B.V.;

  • Erik Malmberg, Investment Advisory Professional, Triton Advisers AB, as a member appointed by Oy Etra Invest Ab;

  • Hanna Kaskela, Director of Responsible Investments, Varma Mutual Pension Insurance Company

Jan Johansson, Chair of Suominen’s Board of Directors, serves as the fourth member of the Nomination Board. The shareholders entitled to appoint members to the Nomination Board were determined on the basis of the registered holdings in the company’s shareholders' register on September 1, 2020.
SHORT TERM RISKS AND UNCERTAINTIES

Currently the COVID-19 pandemic is causing uncertainty. The key risks related to the virus have concerned the health and safety of Suominen personnel and customers, possible shortages of raw materials as well as potential closures of customers’ or our own plants due to virus infections or authority decisions and issues linked to logistics. These risks remain valid in the last quarter of the year as unfortunately the coronavirus situation seems to be deteriorating in many countries.

We have implemented extensive precautions to protect the health and safety of our employees and to ensure business continuity and progress of our strategic projects during the pandemic. We continuously monitor the raw material situation closely and we have identified risk mitigation measures such as utilization of supplementary raw material sources.


The vast majority of our customers have also experienced increased demand for their products and thus our customer credit risks have not materially increased. The COVID-19 pandemic has not increased Suominen’s risk of impairment losses on non-current assets.

Suominen’s other risks and uncertainties include, but are not limited to: risks related to manufacturing, competition, raw material prices and availability and customer specific volumes and credits, changes in legislation, political environment or economic conditions and investments, and financial risks.

A more detailed description of risks is available in Suominen’s Annual Report and Q1/2020 Interim report at suominen.fi/investors.


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.

The demand for nonwovens has increased due to COVID-19 pandemic. In the short term, the higher demand is expected to continue. In the longer term, the COVID-19 pandemic may lead to a continued increase in demand for nonwovens for cleaning and disinfection products.



OUTLOOK FOR 2020

Suominen reiterates the outlook presented on June 17, 2020, in which Suominen expects that in 2020 its comparable operating profit will improve significantly from 2019. In 2019, Suominen’s operating profit amounted to EUR 8.1 million. In financial years 2020 and 2019 Suominen had no items affecting the comparability of the operating profit.

CORPORATE GOVERNANCE AND REMUNERATION STATEMENTS

Suominen has prepared a separate Corporate Governance Statement and a Remuneration Statement for
2019, which comply with the recommendations of the Finnish Corporate Governance Code for listed
companies. The statements also cover other central areas of corporate governance. The statements have been published on Suominen's website, separately from the Report of the Board of Directors, at www.suominen.fi.

AUDIOCAST AND CONFERENCE CALL

Petri Helsky, President & CEO, and Toni Tamminen, CFO, will present the result in English in an audiocast for analyst, investors and media on October 27 at 11:00 a.m. (EET). The audiocast can be followed at https://suominen.videosync.fi/2020-q3-results. The recording of the audiocast and the presentation material will be available after the event at www.suominen.fi.

Conference call participants are requested to dial on:
SE: +46 856 642 651
UK: +44 333 300 0804
US: +1 631 913 1422

The confirmation code for joining the conference call is 30794525#.

NEXT FINANCIAL REPORT

Suominen Corporation will publish its Financial Statements Release 2020 on February 4, 2021 approximately at 9:30 a.m. (EET).

SUOMINEN GROUP 1 JANUARY–30 SEPTEMBER 2020

The figures in this interim report 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 interim report has not been audited.

This interim 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 2019, with the exception of the effect of the new accounting standards and interpretations which have been applied from 1.1.2020.

The new or amended standards or interpretations applicable from 1.1.2020 are not material for Suominen Group.


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

EUR thousand

30.9.2020

30.9.2019

31.12.2019

Assets

Non-current assets

Goodwill

15,496

15,496

15,496

Intangible assets

17,613

20,780

20,020

Property, plant and equipment

106,082

126,352

121,584

Right-of-use assets

14,309

15,384

14,319

Loan receivables

3,650

3,348

3,650

Equity instruments

777

777

777

Other non-current receivables

69

43

70

Deferred tax assets

2,647

2,097

2,091

Total non-current assets

160,642

184,277

178,007

Current assets

Inventories

37,977

41,561

39,257

Trade receivables

53,671

52,905

46,728

Loan receivables

3,256

4,017

3,845

Other current receivables

5,693

4,747

3,820

Assets for current tax

3,652

996

701

Cash and cash equivalents

48,742

34,717

37,741

Total current assets

152,991

138,943

132,093

Total assets

313,633

323,220

310,100

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

81,361

81,269

81,269

Treasury shares

-44

-44

-44

Fair value and other reserves

2

264

264

Exchange differences

-8,131

3,944

707

Retained earnings

34,344

14,897

13,715

Total equity attributable to owners of the parent

144,074

136,871

132,452



Liabilities

Non-current liabilities

Deferred tax liabilities

13,444

12,928

12,786

Liabilities from defined benefit plans

769

769

788

Provisions

1,665

1,595

1,608

Non-current lease liabilities

10,914

11,371

10,464

Other non-current liabilities

17

17

17

Debentures

82,563

81,428

81,714

Total non-current liabilities

109,372

108,107

107,375

Current liabilities

Current lease liabilities

2,817

2,990

2,986

Other current interest-bearing liabilities

14,000

14,000

Liabilities for current tax

787

362

5

Trade payables and other current liabilities

56,584

60,890

53,282

Total current liabilities

60,188

78,242

70,273

Total liabilities

169,559

186,349

177,648

Total equity and liabilities

313,633

323,220

310,100

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Restated

Restated

Restated

EUR thousand

7-9/2020

7-9/2019

1-9/2020

1-9/2019

1-12/2019

Net sales

115,435

103,363

347,808

316,953

411,412

Cost of goods sold

-95,751

-95,071

-295,320

-288,560

-374,501

Gross profit

19,684

8,292

52,488

28,393

36,911

Other operating income

694

694

2,031

2,297

2,903

Sales, marketing and administration expenses

-6,450

-6,888

-20,740

-20,750

-27,268

Research and development expenses

-807

-860

-2,131

-2,582

-3,376

Other operating expenses

-215

-130

-685

-633

-1,041

Operating profit

12,907

1,108

30,962

6,724

8,129

Net financial expenses

-1,761

-1,080

-5,518

-4,072

-5,998

Profit before income taxes

11,146

28

25,444

2,652

2,132

Income taxes

-270

-108

-2,622

-1,232

-1,907

Profit for the period

10,877

-80

22,822

1,420

225

Earnings per share, EUR

Basic

0.19

0.00

0.40

0.02

0.00

Diluted

0.19

0.00

0.40

0.02

0.00

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

EUR thousand

7-9/2020

7-9/2019

1-9/2020

1-9/2019

1-12/2019

Profit for the period

10,877

-80

22,822

1,420

225

Other comprehensive income:

Other comprehensive income that will be subsequently reclassified to profit or loss

Exchange differences

-5,976

4,116

-9,252

5,130

1,570

Reclassified to profit or loss

-327

Income taxes related to other comprehensive income

447

-455

479

-517

-193

Total

-5,529

3,661

-9,100

4,614

1,377

Other comprehensive income that will not be subsequently reclassified to profit or loss

Remeasurements of defined benefit plans

75

Income taxes related to other comprehensive income

-21

Total

54

Total other comprehensive income

-5,529

3,661

-9,100

4,614

1,431

Total comprehensive income for the period

5,347

3,581

13,722

6,034

1,656

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EUR thousand

Share capital

Share premium account

Reserve for invested unrestricted equity

Treasury shares

Equity 1.1.2020

11,860

24,681

81,269

-44

Profit for the period

Other comprehensive income

Total comprehensive income

Share-based payments

Conveyance of treasury shares

92

Dividends paid

Equity 30.9.2020

11,860

24,681

81,361

-44


EUR thousand

Exchange differences

Fair value and other reserves

Retained earnings

Total equity attributable to owners of the parent

Equity 1.1.2020

707

264

13,715

132,452

Profit for the period

22,822

22,822

Other comprehensive income

-8,838

-262

-9,100

Total comprehensive income

-8,838

-262

36,537

13,722

Share-based payments

684

684

Conveyance of treasury shares

92

Dividends paid

-2,876

-2,876

Equity 30.9.2020

-8,131

2

34,344

144,074


EUR thousand

Share capital

Share premium account

Reserve for invested unrestricted equity

Treasury shares

Equity 1.1.2019

11,860

24,681

81,185

-44

Profit / loss for the period

Other comprehensive income

Total comprehensive income

Share-based payments

Conveyance of treasury shares

84

Equity 30.9.2019

11,860

24,681

81,269

-44


EUR thousand

Exchange differences

Fair value and other reserves

Retained earnings

Total equity attributable to owners of the parent

Equity 1.1.2019

-669

264

13,237

130,513

Profit / loss for the period

1,420

1,420

Other comprehensive income

4,614

4,614

Total comprehensive income

4,614

1,420

6,034

Share-based payments

240

240

Conveyance of treasury shares

84

Equity 30.9.2019

3,944

264

14,897

136,871


EUR thousand

Share capital

Share premium account

Reserve for invested unrestricted equity

Treasury shares

Equity 1.1.2019

11,860

24,681

81,185

-44

Profit for the period

Other comprehensive income

Total comprehensive income

Share-based payments

Conveyance of treasury shares

84

Equity 31.12.2019

11,860

24,681

81,269

-44


EUR thousand

Exchange differences

Fair value and other reserves

Retained earnings

Total equity attributable to owners of the parent

Equity 1.1.2019

-669

264

13,237

130,513

Profit for the period

225

225

Other comprehensive income

1,377

54

1,431

Total comprehensive income

1,377

279

1,656

Share-based payments

198

198

Conveyance of treasury shares

84

Equity 31.12.2019

707

264

13,715

132,452

CONSOLIDATED STATEMENT OF CASH FLOWS

EUR thousand

1-9/2020

1-9/2019

1-12/2019

Cash flow from operations

Profit for the period

22,822

1,420

225

Total adjustments to profit for the period

25,672

25,861

34,585

Cash flow before changes in net working capital

48,494

27,281

34,810

Change in net working capital

-2,251

611

1,631

Financial items

-3,224

-2,613

-5,222

Income taxes

-3,882

-1,120

-1,324

Cash flow from operations

39,137

24,160

29,895

Cash flow from investments

Investments in property, plant and equipment and intangible assets

-6,474

-9,410

-10,520

Sales proceeds from property, plant and equipment and intangible assets

0

73

Cash flow from investments

-6,474

-9,410

-10,447

Cash flow from financing

Drawdown of current interest-bearing liabilities

15,000

24,000

38,000

Repayment of current interest-bearing liabilities

-31,316

-32,876

-47,572

Dividends paid

-2,876

Cash flow from financing

-19,192

-8,876

-9,572

Change in cash and cash equivalents

13,471

5,874

9,875

Cash and cash equivalents at the beginning of the period

37,741

27,757

27,757

Effect of changes in exchange rates

-2,470

1,086

109

Change in cash and cash equivalents

13,471

5,874

9,875

Cash and cash equivalents at the end of the period

48,742

34,717

37,741

KEY RATIOS

Restated

Restated

7-9/
2020

7-9/
2019

1-9/
2020

1-9/
2019

1-12/
2019

Change in net sales, % *

11.7

-1.3

9.7

-1.4

-4.6

Gross profit, as percentage of net sales, %

17.1

8.0

15.1

9.0

9.0

EBITDA, as percentage of net sales, %

15.7

7.6

13.6

8.3

8.2

Operating profit, as percentage of net sales, %

11.2

1.1

8.9

2.1

2.0

Comparable operating profit, as percentage of net sales, %

11.2

1.1

8.9

2.1

2.0

Net financial items, as percentage of net sales, %

-1.5

-1.0

-1.6

-1.3

-1.5

Profit before income taxes, as percentage of net sales, %

9.7

0.0

7.3

0.8

0.5

Profit for the period, as percentage of net sales, %

9.4

-0.1

6.6

0.4

0.1

Gross capital expenditure, EUR thousand

2,411

2,277

4,867

8,566

11,198

Depreciation and amortization, EUR thousand

5,200

6,726

16,416

19,507

25,539

Return on equity, rolling 12 months, %

15.7

-0.4

0.2

Return on invested capital, rolling 12 months, %

13.8

3.0

3.7

Equity ratio, %

46.0

42.4

42.7

Gearing, %

29.9

52.1

50.7

Average number of personnel

687

689

685

Earnings per share, EUR, basic

0.19

0.00

0.40

0.02

0.00

Earnings per share, EUR, diluted

0.19

0.00

0.40

0.20

0.00

Cash flow from operations per share, EUR

0.35

0.30

0.68

0.42

0.52

Equity per share, EUR

2.50

2.38

2.30

Number of shares, end of period, excluding treasury shares

57,568,341

57,529,868

57,529,868

Share price, end of period, EUR

4.95

2.44

2.31

Share price, period low, EUR

2.00

2.04

2.04

Share price, period high, EUR

5.36

2.70

2.70

Volume weighted average price during the period, EUR

3.66

2.41

2.38

Market capitalization, EUR million

285.0

140.4

132.9

Number of traded shares during the period

6,483,441

2,992,411

4,655,863

Number of traded shares during the period, % of average number of shares

11.3

5.2

8.1

* Compared with the corresponding period in the previous year.

30.9.2020

30.9.2019

31.12.2019

Interest-bearing net debt, EUR thousands

Non-current interest-bearing liabilities, nominal value

95,914

96,371

95,464

Current interest-bearing liabilities, nominal value

2,817

16,990

16,986

Interest-bearing receivables and cash and cash equivalents

-55,648

-42,083

-45,236

Interest-bearing net debt

43,084

71,279

67,213

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 2019. The link between the components of the alternative performance measures and the consolidated financial statements is presented in Suominen’s Annual Report for 2019.

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

30.9.2020

30.9.2019

31.12.2019

Profit for the period

22,822

1,420

225

Average share-issue adjusted number of shares

57,543,631

57,511,273

57,515,960

Average diluted share-issue adjusted number of shares excluding treasury shares

57,727,013

57,576,963

57,601,340

Earnings per share

EUR

Basic

0.40

0.02

0.00

Diluted

0.40

0.02

0.00

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


30.9.2020

30.9.2019

31.12.2019

Cash flow from operations, EUR thousand

39,137

24,160

29,894

Share-issue adjusted number of shares excluding treasury shares, end of reporting period

57,568,341

57,529,868

57,529,868

Cash flow from operations per share, EUR

0.68

0.42

0.52


Equity per share

Equity per share

Total equity

=

Share-issue adjusted number of shares excluding treasury shares, end of reporting period


30.9.2020

30.9.2019

31.12.2019

Total equity attributable to owners of the parent, EUR thousand

144,074

136,871

132,452

Share-issue adjusted number of shares excluding treasury shares, end of reporting period

57,568,341

57,529,868

57,529,868

Equity per share, EUR

2.50

2.38

2.30

Market capitalization

Market capitalization

=

Number of shares at the end of reporting period excluding treasury shares x share price at the end of period


30.9.2020

30.9.2019

31.12.2019

Number of shares at the end of reporting period excluding treasury shares

57,568,341

57,529,868

57,529,868

Share price at end of the period, EUR

4.95

2.44

2.31

Market capitalization, EUR million

285.0

140.4

132.9

Share turnover

Share turnover

=

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


30.9.2020

30.9.2019

31.12.2019

Number of shares traded during the period

6,483,441

2,992,411

4,655,863

Average number of shares excluding treasury shares

57,543,631

57,511,273

57,515,960

Share turnover, %

11.3

5.2

8.1

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 2020 or 2019

EBITDA

EBITDA

=

EBIT + depreciation, amortization and impairment losses


EUR thousand

30.9.2020

30.9.2019

31.12.2019

Operating profit

30,962

6,724

8,129

+ Depreciation, amortization and impairment losses

16,416

19,507

25,539

EBITDA

47,378

26,231

33,668

Gross capital expenditure

EUR thousand

30.9.2020

30.9.2019

31.12.2019

Increases in intangible assets

283

2,003

2,224

Increases in property, plant and equipment

4,583

6,563

8,974

Gross capital expenditure

4,867

8,566

11,198

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

30.9.2020

30.9.2019

31.12.2019

Interest-bearing liabilities

96,295

109,789

109,163

Tender and issuance costs of the debentures

2,437

3,572

3,286

Interest bearing receivables

-6,905

-7,365

-7,495

Cash and cash equivalents

-48 742

-34,717

-37,741

Interest-bearing net debt

43,084

71,279

67,213

Interest-bearing liabilities

96,295

109,789

109,163

Tender and issuance costs of the debentures

2,437

3,572

3,286

Nominal value of interest-bearing liabilities

98,731

113,361

112,450

Return on equity (ROE), %

Return on equity (ROE), %

=

Profit for the reporting period (rolling 12 months) x 100

Total equity (quarterly average)

EUR thousand

30.9.2020

30.9.2019

31.12.2019

Profit for the reporting period (rolling 12 months)

21,627

-595

225

Total equity attributable to owners of the parent 30.9.2019 / 30.9.2018 / 31.12.2018

136,871

130,981

130,513

Total equity attributable to owners of the parent 31.12.2019 / 31.12.2018 / 31.3.2019

132,452

130,513

133,776

Total equity attributable to owners of the parent 31.3.2020 / 31.3.2019 / 30.6.2019

135,868

133,776

133,178

Total equity attributable to owners of the parent 30.6.2020 / 30.6.2019 / 30.9.2019

138,551

133,178

136,871

Total equity attributable to owners of the parent 30.9.2020 / 30.9.2019 / 31.12.2019

144,074

136,871

132,452

Average

137,563

133,064

133,358

Return on equity (ROE), %

15.7

-0.4

0.2

Invested capital

Invested capital

=

Total equity + interest-bearing liabilities


EUR thousand

30.9.2020

30.9.2019

31.12.2019

Total equity attributable to owners of the parent

144,074

136,871

132,452

Interest-bearing liabilities

96,295

109,789

109,163

Invested capital

240,368

246,660

241,615

Return on invested capital (ROI), %

Return on invested capital (ROI), %

=

Operating profit + financial income (rolling 12 months) x 100

Invested capital, quarterly average


EUR thousand

30.9.2020

30.9.2019

31.12.2019

Operating profit (rolling 12 months)

32,367

6,363

8,129

Financial income (rolling 12 months)

942

884

981

Total

33,310

7,247

9,110

Invested capital 30.9.2019 / 30.9.2018 / 31.12.2018

246,660

227,186

231,977

Invested capital 31.12.2019 / 31.12.2018 / 31.3.2019

241,615

247,263

250,259

Invested capital 31.3.2020 / 31.3.2019 / 30.6.2019

240,761

250,259

249,752

Invested capital 30.6.2020 / 30.6.2019 / 30.9.2019

238,195

249,752

246,660

Invested capital 30.9.2020 / 30.9.2019 / 31.12.2019

240,368

246,660

241,615

Average

241,520

244,224

244,053

Return on invested capital (ROI), %

13.8

3.0

3.7

Financial income does not include fair value changes of assets at fair value through profit or loss.

Equity ratio, %

Equity ratio, %

=

Total equity x 100

Total assets - advances received


EUR thousand

30.9.2020

30.9.2019

31.12.2019

Total equity attributable to owners of the parent

144,074

136,871

132,452

Total assets

313,633

323,220

310,100

Advances received

-248

-113

-58

313,385

323,107

310,042

Equity ratio, %

46.0

42.4

42.7

Gearing, %

Gearing, %

=

Interest-bearing net debt x 100

Total equity


EUR thousand

30.9.2020

30.9.2019

31.12.2019

Interest-bearing net debt

43,084

71,279

67,213

Total equity attributable to owners of the parent

144,074

136,871

132,452

Gearing, %

29.9

52.1

50.7

NET SALES BY GEOGRAPHICAL MARKET AREA

EUR thousand

1-9/2020

1-9/2019

1-12/2019

Finland

2,473

1,977

2,527

Rest of Europe

115,215

113,322

145,055

North and South America

227,180

198,355

259,560

Rest of the world

2,941

3,299

4,270

Total

347,808

316,953

411,412

QUARTERLY SALES DEVELOPMENT BY BUSINESS AREA

2020

2019

EUR thousand

7-9

4-6

1-3

10-12

7-9

4-6

1-3

Americas

71,947

77,162

73,170

62,180

66,161

65,011

68,326

Europe

43,542

45,047

37,054

32,294

37,233

38,798

41,466

Unallocated exchange differences and eliminations

-54

-38

-21

-15

-30

14

-25

Total

115,435

122,170

110,203

94,459

103,363

103,824

109,766

QUARTERLY DEVELOPMENT

2020

2019

EUR thousand

7-9

4-6

1-3

10-12

7-9

4-6

1-3

Net sales

115,435

122,170

110,203

94,459

103,363

103,824

109,766

EBITDA

18,107

17,989

11,282

7,437

7,834

9,089

9,309

as % of net sales

15.7

14.7

10.2

7.9

7.6

8.8

8.5

Comparable operating profit

12,907

12,391

5,664

1,405

1,108

2,655

2,961

as % of net sales

11.2

10.1

5.1

1.5

1.1

2.6

2.7

Items affecting comparability

Operating profit

12,907

12,391

5,664

1,405

1,108

2,655

2,961

as % of net sales

11.2

10.1

5.1

1.5

1.1

2.6

2.7

Net financial items

-1,761

-1,813

-1,945

-1,926

-1,080

-1,695

-1,297

Profit before income taxes

11,146

10,579

3,719

-521

28

960

1,665

as % of net sales

9.7

8.7

3.4

-0.6

0.0

0.9

1.5

RELATED PARTY INFORMATION

The related parties of Suominen include the members of the Board of Directors, President & CEO and the members of the 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 March 19, 2020 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 2020 was 29,121 shares. The shares were transferred on May 28, 2020 and the value of the transferred shares totaled EUR 92,400, or approximately EUR 3.17 per share.

In accordance with the terms and conditions of the matching restricted share plan 2019, Suominen Corporation transferred a total of 9,352 shares without consideration to the participants of the plan’s vesting period 2019-2020. Of the total number of transferred shares, 4,676 shares were transferred to President & CEO Petri Helsky and 4,676 shares to another member of the Executive Team.

CHANGES IN PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS

30.9.2020

30.9.2019

31.12.2019

EUR thousand

Property, plant and equip.

Intang. assets

Property, plant and equip.

Intang. assets

Property, plant and equip.

Intang. assets

Carrying amount at the beginning of the period

121,584

20,020

129,391

21,231

129,391

21,231

Application of IFRS 16

-149

-149

Capital expenditure and increases

4,583

283

6,563

2,003

8,974

2,224

Disposals and decreases

0

-1

0

-1

Depreciation, amortization and impairment losses

-11,077

-2,675

-14,281

-2,477

-18,608

-3,448

Exchange differences and other changes

-9,008

-15

4,829

23

1,977

12

Carrying amount at the end of the period

106,082

17,613

126,352

20,780

121,584

20,020


Goodwill is not included in intangible assets.

30.9.2020

30.9.2019

31.12.2019

EUR thousand

Right-of-use assets

Right-of-use assets

Right-of-use assets

Carrying amount at the beginning of the period

14,319

16,946

16,946

Increases

2,852

868

946

Disposals and decreases

-9

-112

-215

Depreciation, amortization and impairment losses

-2,664

-2,749

-3,483

Exchange differences and other changes

-190

432

125

Carrying amount at the end of the period

14,309

15,384

14,319

CHANGES IN INTEREST-BEARING LIABILITIES

EUR thousand

1-9/2020

1-9/2019

1-12/2019

Total interest-bearing liabilities at the beginning of the period

109,163

101,463

101,463

Current liabilities at the beginning of the period

16,986

20,765

20,765

Application of IFRS 16

2,664

2,664

Repayment of current liabilities, cash flow items

-31,316

-32,876

-47,572

Drawdown of current liabilities, cash flow items

15,000

24,000

38,000

Increases in current liabilities, non-cash flow items

201

189

218

Decreases of current liabilities, non-cash flow items

-291

-94

-99

Reclassification from non-current liabilities

2,309

2,231

2,942

Periodization of debenture to amortized cost, non-cash flow items

43

43

Exchange rate difference, non-cash flow item

-72

68

25

Current liabilities at the end of the period

2,817

16,990

16,986

Non-current liabilities at the beginning of the period

10,464

84

84

Application of IFRS 16

12,622

12,622

Increases in non-current liabilities, non-cash flow items

2,929

680

733

Decreases of non-current liabilities, non-cash flow items

0

-19

-121

Reclassification to current liabilities

-2,309

-2,231

-2,942

Exchange rate difference, non-cash flow item

-169

236

88

Non-current liabilities at the end of the period

10,914

11,371

10,464

Non-current debentures at the beginning of the period

81,714

80,615

80,615

Periodization of debenture to amortized cost, non-cash flow items

850

813

1,099

Non-current debentures at the end of the period

82,563

81,428

81,714

Total interest-bearing liabilities at the end of the period

96,294

109,789

109,163

CONTINGENT LIABILITIES

EUR thousands

30.9.2020

30.9.2019

31.12.2019

Other commitments

Leasing commitments

135

233

179

Contractual commitments to acquire property, plant and equipment

4,872

774

Commitments to leases not yet commenced

33

Guarantees

On own behalf

8,083

10,683

9,906

Other own commitments

28,055

2,371

2,203

36,137

13,054

12,108

NOMINAL AND FAIR VALUES OF DERIVATIVE INSTRUMENTS

30.9.2020

30.9.2019

31.12.2019

EUR thousand

Nominal value

Fair
value

Nominal
value

Fair
value

Nominal
value

Fair
value

Currency forward contracts

Hedge accounting not applied

3,965

-12

2,783

-19

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. Carrying amount

e. Fair value


Classification

EUR thousand

a.

b.

c.

d.

e.

Equity instruments

347

429

777

777

Loan receivables

3,256

3,650

6,905

6,905

Trade receivables

53,671

53,671

53,671

Derivative receivables

6

6

6

Interest and other financial receivables

940

940

940

Cash and cash equivalents

48,742

48,742

48,742

Total 30.9.2020

3,609

107,003

429

111,042

111,042


EUR thousand

a.

b.

c.

d.

e.

Equity instruments

347

429

777

777

Loan receivables

3,845

3,650

7,495

7,495

Trade receivables

46,728

46,728

46,728

Interest and other financial receivables

313

313

313

Cash and cash equivalents

37,741

37,741

37,741

Total 31.12.2019

4,193

88,432

429

93,054

93,054

Principles in estimating fair value of financial assets for 2020 are the same as those used for preparing the consolidated financial statements for 2019.

Suominen monitors constantly the open balances of the customers and takes action if payments are delayed. The COVID-19 pandemic has increased the credit risk of certain customers depending on the markets in which they operate, but as a whole, also the customers have experienced increased demand of their products and thus their credit risks and Suominen’s expected credit losses arising from trade receivables have not materially increased.

FINANCIAL LIABILITIES

30.9.2020

31.12.2019

EUR thousand

Carrying amount

Fair value

Nominal value

Carrying amount

Fair value

Nominal value

Non-current financial liabilities

Debentures

82,563

86,488

85,000

81,714

86,063

85,000

Lease liabilities

10,914

10,914

10,914

10,464

10,464

10,464

Total non-current financial liabilities

93,477

97,402

95,914

92,177

96,526

95,464

Current financial liabilities

Current loans from financial institutions

14,000

14,000

14,000

Lease liabilities

2,817

2,817

2,817

2,986

2,986

2,986

Interest accruals

2,151

2,151

2,151

551

551

551

Derivative liabilities

18

18

18

Other current liabilities

736

736

736

440

440

440

Trade payables

42,499

42,499

42,499

44,495

44,495

44,495

Total current financial liabilities

48,222

48,222

48,222

62,473

62,473

62,473

Total

141,699

145,624

144,136

154,650

158,999

157,936


Principles in estimating fair value for financial liabilities for 2020 are the same as those used for preparing the consolidated financial statements for 2019.

FAIR VALUE MEASUREMENT HIERARCHY

EUR thousands

Level 1

Level 2

Level 3

Financial assets and liabilities at fair value

Currency forward contracts, receivables

6

Loan receivables

3,256

Equity instruments

777

Total

6

4,033

Derivatives at fair value

Currency forward contracts, liabilities

-18

Total

-18

Principles in estimating fair value of financial assets and their hierarchies for 2020 are the same as those used for preparing the consolidated financial statements for 2019.


There were no transfers in the fair value measurement hierarchy levels during the reporting period.

RESTATEMENT OF PREVIOUSLY PUBLISHED FIGURES

Suominen has reclassified some overhead expenses from cost of goods sold to sales, marketing and administration expenses.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

Published

Restatement

Restated

EUR thousand

1-9/2019

1-9/2019

1-9/2019

Net sales

316,953

316,953

Cost of goods sold

-290,597

2,037

-288,560

Gross profit

26,356

2,037

28,393

Other operating income

2,297

2,297

Sales, marketing and administration expenses

-18,713

-2,037

-20,750

Research and development

-2,582

-2,582

Other operating expenses

-633

-633

Operating profit

6,724

6,724

Net financial expenses

-4,072

-4,072

Profit before income taxes

2,652

2,652

Income taxes

-1,232

-1,232

Profit / loss for the period

1,420

1,420


Published

Restatement

Restated

EUR thousand

1-12/2019

1-12/2019

1-12/2019

Net sales

411,412

411,412

Cost of goods sold

-377,255

2,754

-374,501

Gross profit

34,157

2,754

36,911

Other operating income

2,903

2,903

Sales, marketing and administration expenses

-24,513

-2,754

-27,267

Research and development

-3,376

-3,376

Other operating expenses

-1,041

-1,041

Operating profit

8,129

8,129

Net financial expenses

-5,998

-5,998

Profit before income taxes

2,132

2,132

Income taxes

-1,907

-1,907

Profit / loss for the period

225

225

SUOMINEN CORPORATION
Board of Directors



For additional information, please contact:
Petri Helsky, President & CEO, tel. +358 (0)10 214 3080
Toni Tamminen, CFO, tel. +358 (0)10 214 3051




Suominen manufactures nonwovens as roll goods for wipes and other applications. Our vision is to be the frontrunner for nonwovens innovation and sustainability. The end products made of Suominen’s nonwovens, such as wet wipes, feminine care products and swabs, are present in people’s daily life worldwide. Suominen’s net sales in 2019 were EUR 411.4 million and we have nearly 700 professionals working in Europe and in the Americas. Suominen’s shares are listed on Nasdaq Helsinki. Read more at www.suominen.fi.


Distribution:
Nasdaq Helsinki
Main media
www.suominen.fi

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