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Strategy execution –
Financial view
Capital Markets Day, 11 November 2015
Tapio Engström, CFO
Our purpose is to make nonwovens continuously better for people.
Mid-term
financial targets
11/11/2015 2
Our purpose is to make nonwovens continuously better for people.
4.7 %
7.5 %
14.4 %
0%
5%
10%
15%
20%
2012 2013 2014 Q3/15
Net sales growth, %
101.0 96.2
34.7 30.5
0
20
40
60
80
100
120
2012 2013 2014 Q3/15
Gearing, %
Solid financial development
Progress on mid-term financial targets
12.4 %
15.7 %
17.4 %
0%
5%
10%
15%
20%
2012 2013 2014 Q3/15
ROI, %
• Net sales growth compared with
previous year or the Q3 of previous
year.
• Target level marked with dashed line.
• Figures are of continuing operations.
n/a
11/11/2015 3
n/a
Our purpose is to make nonwovens continuously better for people.
Profitability
transformation
11/11/2015 4
Our purpose is to make nonwovens continuously better for people.
Portfolio change drives top line growth
41%
17%
11%
21%
8%
2%
2014 (401.8 M€) 2017 (~500 M€)
Illustrative.
11/11/2015
• Portfolio change is increasing the share of higher value added products in our
portfolio
• Envisioned healthy volume growth supports the profitability development
47%
19%
10%
18%
6%
2012 (357.9 M€)
Baby wipes Household wipes Workplace wipes Personal care wipes Hygiene and medical products Others
5
Our purpose is to make nonwovens continuously better for people.
9.0%
10.7%
12.4%
13.8%
0%
3%
6%
9%
12%
15%
2012 2013 2014 Q3/15
Gross profit, % of net sales
Positive development in gross profit, SGA costs
and operating profit
11/11/2015 6
6.6%
6.0% 5.8% 6.1%
0%
2%
4%
6%
8%
2012 2013 2014 Q3/15
SGA, % of net sales
*Excluding non-recurring items
4.2%
5.2%
6.7%
8.1%
0%
2%
4%
6%
8%
10%
2012 2013 2014 Q3/15
Operating profit*, % of net sales
Our purpose is to make nonwovens continuously better for people.
Raw materials – The logic
• Roughly 60–70% of costs are raw
materials.
• We are the 9th largest nonwovens
producer in the world with long
relationships with key suppliers.
• Contracts covering ca. 50% of our
net sales include a pass-through
clause.
• Between raw materials for fibers
and the final fiber, there are
intermediate steps and in that value
chain market dynamics are in play.
• Raw materials are not hedged as
correlations are not predictable.
11/11/2015 7
30%
23%
23%
21%
3%
Viscose Pulp Polypropene* Polyester Other
* Including sourced PP Spunbond.
Our purpose is to make nonwovens continuously better for people.
EUR/USD – A factor to pay attention to
• We have estimated that 10% change in EUR/USD exchange
rate should have, based on the current business structure, on
a full year basis, approximately 2.5 MEUR effect on operating
profit.
11/11/2015 8
Our purpose is to make nonwovens continuously better for people.
Cash flow – always in focus
Cash flow from operations, M€
24.9
21.3
37.1
16.3
0
5
10
15
20
25
30
35
40
2012 2013 2014 Q1–Q3/15
11/11/2015 9
- In 2015, cash flow accumulation between quarters has been steadier than before.
Cash flow from operations, M€
4.3
16.3
-0.4
11.3
16.9
9.3
4.5 3.9
7.9
-2
0
2
4
6
8
10
12
14
16
18
Our purpose is to make nonwovens continuously better for people.
Growth
investment
program
11/11/2015 10
Our purpose is to make nonwovens continuously better for people.
To implement the strategy, we have a focused
~60 M€ growth investment program
Extend geo-
graphical
reach
Acquisitions
Sustain &
improve
Retrofit Expand
Projected growth investments
approx. 60 M€ until 2017
Not in focus in the strategy period
2015–2017
Some 1-2% of
net sales
1111/11/2015
Our purpose is to make nonwovens continuously better for people.
~60 M€ growth investment program – Timing
12
2015 2016 2017
Retrofit
Paulínia,
Alicante
Q4/2015
Expand
Bethune
H2/2016
Projected growth investments
approx. 60 M€ until 2017
To be
decided
~54 M€ spending in progress ~6 M€
11/11/2015
Our purpose is to make nonwovens continuously better for people.
Funding of the growth investment program secured
Extrapolated from Q3/2015
Source of funding EUR million
Cash (Q3/2015) 36
Cash flow from operations
In 2015, 20+M€ (annualized Q3/2015)
Assume Cash Flow level repeated in 2016 ~20+
Term loan availability 15
Funding in total ~70
Growth investments program in total ~60
11/11/2015 13
Our purpose is to make nonwovens continuously better for people.
Dividend policy
11/11/2015 14
Our purpose is to make nonwovens continuously better for people.
Dividend policy
11/11/2015 15
• Suominen’s policy is to distribute
approximately 30% of its profit
for the period as annual dividend.
• However, as the Board of
Directors of the company
assesses the dividend payout
proposal, it will also consider
Suominen’s future investment
needs and the solidity of the
company’s financial position.
• Of the FY 2014, Suominen
distributed funds 0.01 € per
share, in total some EUR 2.5
million.
-2.8
5.7
10.2
15.1
-5
0
5
10
15
20
2012 2013 2014 Q1-Q3/15
Profit for the period, M€
-0.01
0.02
0.04
0.06
0.01
-0.02
0
0.02
0.04
0.06
0.08
2012 2013 2014 Q1-Q3
2015
EPS DPS
EPS and DPS, €
Our purpose is to make nonwovens continuously better for people.
Summary:
Strategy execution from financial perspective
Strong track record, solid financial position
Ambitious growth scenario
Growth investment plan:
Financial position secures the execution
Dividends form an important element
in the creation of shareholder value
1611/11/2015
~30 %
~60
M€
500
M€
Thank you!
11/11/2015 17

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Capital Markets Day 2015, Tapio Engström, CFO on Nov 11

  • 1. Strategy execution – Financial view Capital Markets Day, 11 November 2015 Tapio Engström, CFO
  • 2. Our purpose is to make nonwovens continuously better for people. Mid-term financial targets 11/11/2015 2
  • 3. Our purpose is to make nonwovens continuously better for people. 4.7 % 7.5 % 14.4 % 0% 5% 10% 15% 20% 2012 2013 2014 Q3/15 Net sales growth, % 101.0 96.2 34.7 30.5 0 20 40 60 80 100 120 2012 2013 2014 Q3/15 Gearing, % Solid financial development Progress on mid-term financial targets 12.4 % 15.7 % 17.4 % 0% 5% 10% 15% 20% 2012 2013 2014 Q3/15 ROI, % • Net sales growth compared with previous year or the Q3 of previous year. • Target level marked with dashed line. • Figures are of continuing operations. n/a 11/11/2015 3 n/a
  • 4. Our purpose is to make nonwovens continuously better for people. Profitability transformation 11/11/2015 4
  • 5. Our purpose is to make nonwovens continuously better for people. Portfolio change drives top line growth 41% 17% 11% 21% 8% 2% 2014 (401.8 M€) 2017 (~500 M€) Illustrative. 11/11/2015 • Portfolio change is increasing the share of higher value added products in our portfolio • Envisioned healthy volume growth supports the profitability development 47% 19% 10% 18% 6% 2012 (357.9 M€) Baby wipes Household wipes Workplace wipes Personal care wipes Hygiene and medical products Others 5
  • 6. Our purpose is to make nonwovens continuously better for people. 9.0% 10.7% 12.4% 13.8% 0% 3% 6% 9% 12% 15% 2012 2013 2014 Q3/15 Gross profit, % of net sales Positive development in gross profit, SGA costs and operating profit 11/11/2015 6 6.6% 6.0% 5.8% 6.1% 0% 2% 4% 6% 8% 2012 2013 2014 Q3/15 SGA, % of net sales *Excluding non-recurring items 4.2% 5.2% 6.7% 8.1% 0% 2% 4% 6% 8% 10% 2012 2013 2014 Q3/15 Operating profit*, % of net sales
  • 7. Our purpose is to make nonwovens continuously better for people. Raw materials – The logic • Roughly 60–70% of costs are raw materials. • We are the 9th largest nonwovens producer in the world with long relationships with key suppliers. • Contracts covering ca. 50% of our net sales include a pass-through clause. • Between raw materials for fibers and the final fiber, there are intermediate steps and in that value chain market dynamics are in play. • Raw materials are not hedged as correlations are not predictable. 11/11/2015 7 30% 23% 23% 21% 3% Viscose Pulp Polypropene* Polyester Other * Including sourced PP Spunbond.
  • 8. Our purpose is to make nonwovens continuously better for people. EUR/USD – A factor to pay attention to • We have estimated that 10% change in EUR/USD exchange rate should have, based on the current business structure, on a full year basis, approximately 2.5 MEUR effect on operating profit. 11/11/2015 8
  • 9. Our purpose is to make nonwovens continuously better for people. Cash flow – always in focus Cash flow from operations, M€ 24.9 21.3 37.1 16.3 0 5 10 15 20 25 30 35 40 2012 2013 2014 Q1–Q3/15 11/11/2015 9 - In 2015, cash flow accumulation between quarters has been steadier than before. Cash flow from operations, M€ 4.3 16.3 -0.4 11.3 16.9 9.3 4.5 3.9 7.9 -2 0 2 4 6 8 10 12 14 16 18
  • 10. Our purpose is to make nonwovens continuously better for people. Growth investment program 11/11/2015 10
  • 11. Our purpose is to make nonwovens continuously better for people. To implement the strategy, we have a focused ~60 M€ growth investment program Extend geo- graphical reach Acquisitions Sustain & improve Retrofit Expand Projected growth investments approx. 60 M€ until 2017 Not in focus in the strategy period 2015–2017 Some 1-2% of net sales 1111/11/2015
  • 12. Our purpose is to make nonwovens continuously better for people. ~60 M€ growth investment program – Timing 12 2015 2016 2017 Retrofit Paulínia, Alicante Q4/2015 Expand Bethune H2/2016 Projected growth investments approx. 60 M€ until 2017 To be decided ~54 M€ spending in progress ~6 M€ 11/11/2015
  • 13. Our purpose is to make nonwovens continuously better for people. Funding of the growth investment program secured Extrapolated from Q3/2015 Source of funding EUR million Cash (Q3/2015) 36 Cash flow from operations In 2015, 20+M€ (annualized Q3/2015) Assume Cash Flow level repeated in 2016 ~20+ Term loan availability 15 Funding in total ~70 Growth investments program in total ~60 11/11/2015 13
  • 14. Our purpose is to make nonwovens continuously better for people. Dividend policy 11/11/2015 14
  • 15. Our purpose is to make nonwovens continuously better for people. Dividend policy 11/11/2015 15 • Suominen’s policy is to distribute approximately 30% of its profit for the period as annual dividend. • However, as the Board of Directors of the company assesses the dividend payout proposal, it will also consider Suominen’s future investment needs and the solidity of the company’s financial position. • Of the FY 2014, Suominen distributed funds 0.01 € per share, in total some EUR 2.5 million. -2.8 5.7 10.2 15.1 -5 0 5 10 15 20 2012 2013 2014 Q1-Q3/15 Profit for the period, M€ -0.01 0.02 0.04 0.06 0.01 -0.02 0 0.02 0.04 0.06 0.08 2012 2013 2014 Q1-Q3 2015 EPS DPS EPS and DPS, €
  • 16. Our purpose is to make nonwovens continuously better for people. Summary: Strategy execution from financial perspective Strong track record, solid financial position Ambitious growth scenario Growth investment plan: Financial position secures the execution Dividends form an important element in the creation of shareholder value 1611/11/2015 ~30 % ~60 M€ 500 M€