Suominen Corporation Interim Report 1 January - 30 June 2008
SUOMINEN CORPORATION INTERIM REPORT 18 JULY 2008 AT 8.30 A.M. INTERIM REPORT 1 JANUARY - 30 JUNE 2008 COSTS PRESSURE CONTINUED -------------------------------------------------------------------------------- | KEY FIGURES | 4-6/2008 | 4-6/2007 | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR | 55.2 | 51.2 | 109.6 | 105.5 | 215.2 | | million | | | | | | -------------------------------------------------------------------------------- | Operating profit | 0.6 | 0.5 | 0.5 | 1.7 | 1.7 | | before goodwill | | | | | | | amortisation, EUR | | | | | | | million | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 0.6 | 0.5 | 0.5 | 1.7 | -6.8 | | EUR million | | | | | | -------------------------------------------------------------------------------- | Profit/loss for the | -0.4 | -0.3 | -1.3 | -0.1 | -10.1 | | period, EUR million | | | | | | -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.02 | -0.01 | -0.06 | 0.00 | -0.43 | -------------------------------------------------------------------------------- | Cash flow from | -0.01 | 0.15 | 0.13 | 0.10 | 0.12 | | operations/share, | | | | | | | EUR | | | | | | -------------------------------------------------------------------------------- Outlook: No major changes are anticipated in the level of Suominen's net sales. Underlying operating profit is expected to be on the level of the previous year. Net profit is expected to be on loss. GROUP FINANCIAL RESULTS Suominen Corporation's net sales for the second quarter totalled EUR 55.2 million (51.2). Operating profit was EUR 0.6 million (0.5), profit before taxes EUR -0.6 million (-0.4) and profit after taxes EUR -0.4 million (-0.3). Net sales for the first two quarters totalled EUR 109.6 million (105.5). Operating profit was EUR 0.5 million (1.7), profit before taxes EUR -1.8 million (-0.1) and profit after taxes EUR -1.3 million (-0.1). Raw material prices levelled off temporarily during the spring, however, quoted prices for supplies for the summer period are back to higher levels. The rise in raw material prices, the delay in transferring these increases over to sales prices, and price reductions based on contracts reduced the value added margin by some EUR 2 million. Energy and payroll costs increased by some EUR 1.5 million compared to six months of 2007. The Company's cost-saving programme has generated some EUR 2.5 million since the previous year. Cost-saving and operational enhancement programme Suominen´s Stairs to Top programme extending over a number of years under way covers both operational development and continuous improvement, as well an updated customer offering. During the period under review, the programme brought a total of EUR 2.5 million in cost savings through improved efficiency. In addition, progress was made in sales and product offering programmes. Efficiency-enhancement measures continued to focus on cost savings. Financing Interest-bearing liabilities totalled EUR 97.6 million including capital loans of EUR 10 million. Net repayments of liabilities were EUR 2.0 million. Net financial expenses were EUR 2.3 million (1.8) or 2.1 per cent (1.7) of net sales. A total of EUR 1.2 million was tied up in working capital due to increase in inventories for the summer period. The equity ratio was 27.6 per cent (31.6). When the capital loans are included in shareholders' equity, the equity ratio was 33.5 per cent (33.9) and the ratio of liabilities to shareholders' equity 152.7 per cent (143.2). Cash flow from operations was EUR 0.13 per share (0.10). Investments The Company's gross investments in production totalled EUR 2.0 million (5.1). Planned depreciation amounted to EUR 6.5 million (7.1). Wet Wipes accounted for EUR 0.3 million (1.6), Nonwovens EUR 0.6 million (0.8) and Flexible Packaging EUR 1.1 million (2.7) of total investments. Investments were replacement and maintenance investments. SEGMENT RESULTS During the period under review, net sales of the Wipes and Nonwovens business area totalled EUR 72.0 million, an increase of 8 per cent on the corresponding period in 2007. The business area's operating profit totalled EUR 0.2 million (-0.1). Net sales of Wet Wipes totalled EUR 35.9 million, an increase of 7 per cent on the previous year. Delivery volumes grew, and strong growth was seen in personal care wipes in particular. Average sales prices fell as expected, mainly due to long-term contracts. Development in sales to new customers and sales of Suominen's own product applications was slow. The revision of production recipes launched in the business unit at the beginning of the second quarter enabled a shift to less expensive raw materials for some products, which has slightly improved the margins for sales. The stock of finished products was increased for the summer period. The positive development of operational efficiency and cost-saving measures continued, the impact on performance being mainly attributable to cost-savings. The demand structure for products did not allow any increase in the use of automatic lines in production, and yield increased slower than expected. Net sales of Nonwovens increased by 13 per cent to EUR 41.7 million. Deliveries of thermobonded material for hygiene products increased clearly. In hydroentangled nonwovens, the focus of sales shifted to Europe. There was a clear increase in internal deliveries. The second quarter brought some increases in sales prices. In raw materials, the price increase of viscose took a downturn and the rise in plastic prices also slowed. The high price of raw materials nevertheless eroded the business unit's margins. Implementation of the operational enhancement programme was continued, and the decision was taken to discontinue the unprofitable production of pulp-based nonwoven for wipes. Net sales of Flexible Packaging totalled EUR 37.9 million (38.7) and operating profit EUR 0.7 million (2.1). Net sales and sales volumes decreased slightly from the previous year due to the decrease in hygiene packaging. The demand for carrier bags recovered after the first quarter. Deliveries of food packaging were on the level of the previous year. Sales development of labels and security and system packaging remained positive. Raw material prices saw a downturn in the spring, but resumed their upward trend by early summer. It was not possible to pass on all the increases in raw material prices to sales prices. Production at the Polish plant increased by 20 per cent thanks to the investment in the printing machine made in 2007. The stock of finished products was increased in anticipation of lower production volumes during the summer period. Employee negotiations were concluded in the business area, and will result in a personnel reduction of some 50 people at the Finnish plants during the autumn. CHANGES IN GROUP ORGANISATION AND MANAGEMENT Mr. Petri Rolig was appointed President and CEO of the Company as of 1 May 2008. Mr. Mikko Pellinen was nominated Vice President and General Manager of the Flexible Packaging business area. He will join Suominen on 1 November 2008 at the latest. The Corporate Executive Team comprises, the President and CEO, and the Vice Presidents and General Managers of the Wipes and Nonwovens, and Flexible Packaging businesses, and the Vice President and CFO. SHARE CAPITAL AND SHARES Share trading and price The number of Suominen Corporation's shares traded on the OMX Nordic Exchange in Helsinki from 1 January to 30 June 2008 was 1,114,500 shares or 4.7 per cent of the shares included in the Company's share capital. The trading price varied from EUR 1.47 to EUR 2.25. The final trading price was EUR 1.47, giving the Company a market capitalisation of EUR 34.9 million on 30 June 2008. Share capital The registered number of issued shares of Suominen totals 23,720,112 shares or EUR 11,860,056. There were no changes in share capital during the period under review. The Company's own shares On 1 January 2008, the Company held 36,343 of its own shares, with an acquisition value of EUR 3.19 per share. The Annual General Meeting of Shareholders held on 27 March 2008 authorised the Board of Directors to decide on the acquisition of a maximum of 1,186,000 of the Company's own shares. The authorisation will be valid for 18 months after the decision of the General Meeting. The repurchased shares will be used as payment in business acquisitions or other arrangements in the Company's business, to finance investments, to implement incentive programmes, will be held by the Company, or will be otherwise conveyed or cancelled. The Company's own shares will be repurchased otherwise than in proportion to the holdings of the shareholders by using non-restricted equity through public trading on the OMX Nordic Exchange in Helsinki at the market price prevailing at the time of acquisition. The General Meeting also authorised the Board of Directors to decide on the conveyance of a maximum of 1,222,000 of the Company's own shares. The authorisation will be valid for 18 months after the end of the General Meeting. Within the authorisation the Company has conveyed 31,286 of its own shares as emoluments to the Board of Directors in the period under review. The price of the conveyed shares was EUR 1.63 per share. During the period under review, the Board of Directors did not exercise its authorities to buy the Company's own shares. On 30 June 2008, Suominen Corporation held a total of 5,057 of its own shares, accounting for 0.0 per cent of the share capital and votes. Stock options 2006 and 2007 Under stock option plan 2006, a maximum of 300,000 stock options shall be issued to the President and CEO of Suominen Corporation as specified by the Board of Directors. Each stock option entitles its holder to subscribe for one Suominen Corporation's share with an equivalent book value of EUR 0.50. According to the 2006C stock option plan a total of 100,000 stock options has been issued in the period under review. The share subscription price for the stock options is the trade volume-weighted average price of the Company share on the OMX Nordic Exchange in Helsinki in May 2008 or EUR 1.66. The subscription period for the 2006C stock options is from 2 May 2010 to 30 October 2011. Under stock option plan 2007, a maximum of 200,000 stock options shall be issued to the Executive Team of Suominen Corporation as specified by the Board of Directors. Each stock option entitles its holder to subscribe for one Suominen Corporation's share with an equivalent book value of EUR 0.50. During the period under review, a total of 35,000 stock options has been issued according to the 2007A stock option plan, and a total of 60,000 stock options according to the 2007B stock option plan. The share subscription price for the 2007A stock options is the trade volume-weighted average price of the Company share on the OMX Nordic Exchange in Helsinki in May 2007 or EUR 3.44. The share subscription price for the 2007B stock options is the trade volume-weighted average price of the Company share on the OMX Nordic Exchange in Helsinki in May 2008 or EUR 1.66. The subscription period for the 2007A stock options is from 2 May 2009 to 30 October 2010, and for the 2007B stock options from 2 May 2010 to 30 October 2011. As the registered number of Suominen's issued shares totals 23,720,112, the number of shares may rise to a maximum of 24,220,112 after stock option subscriptions. Other authorisation for the board of directors The Board of Directors is not currently authorised to issue shares, convertible bonds or bonds with warrants. OUTLOOK Consumption of the main products produced by Suominen is expected to grow faster than general consumption on the Company's geographical markets. The focus of Suominen's operations is on securing improvement in profitability, cash flow and capital structure. The ongoing cost-saving and efficiency-enhancement programme is expected to improve Suominen's competitiveness. The prices of main raw materials continued to rise during the first half of the year, and the rise is expected to continue. Also energy prices are expected to remain high. Actions are underway in Group's units to increase sales prices to reflect expected rises in costs. Previously, the guidance concerning outlook for the current year was that Suominen's underlying operating profit is expected to improve on the previous year, and accelerating towards the end of the year. Present general expectations indicate substantial increases in raw material prices affecting the underlying operating profit to be on the level of the previous year. Whole year result is expected to be negative. No major changes are anticipated in the level of net sales. NEAR-FUTURE UNCERTAINTIES The estimate concerning the development of Suominen's net sales is based in part on forecasts and action plans provided by the Group's customers. Changes in these forecasts and plans resulting from changes in the market situation or changes in customers' inventory levels could affect Suominen's margins. Nonwovens and Flexible Packaging purchase oil-based raw materials to the value of some EUR 45 million annually. In addition, significant amounts of viscose, printing inks, and solvents are also purchased. Rapid fluctuations in the world market prices of raw materials affect Suominen's margins. Suominen's cost-saving and operational enhancement efforts are focused on areas such as improving yield, increasing machine speeds, and reducing changeover time. The benefits of these efforts will be most evident if production volumes will not decline from current levels. Delays in the implementation of measures or their failure would have a negative impact on the Company's result. The sensitivity of Suominen's group goodwill, and possible changes in the general assumptions are described in the notes to the financial statements for 2007. Suominen's business risks are described in the report of the Board of Directors for 2007. SUOMINEN CORPORATION CONSOLIDATED 1 JANUARY - 30 JUNE 2008 This interim report has been prepared in compliance with IAS 34 Interim Financial Reporting. Principles for preparing the interim report are the same as those used for preparing the financial statements for 2007, and this interim report should be read parallel to the financial statements for 2007. Amendments to and interpretations of published accounting standards and new accounting standards that came into effect on 1 January 2008 are presented in the financial statements for 2007. The Company complies with the interpretation of IFRIC 10 Interim Financial Reporting and Impairment, which prohibits, for example, the reversal of impairment losses recognised for goodwill during previous interim periods. In its principles for preparing the financial statements, Suominen has not applied any changes allowed by the published new standards and interpretations prior to their official introduction. The most important reform known concerns segment reporting, on which the standard will enter into force on 1 January 2009. The figures in this interim report have not been audited. STATEMENT OF INCOME -------------------------------------------------------------------------------- | EUR 1 000 | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | | | 2008 | 2007 | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | 55 168 | 51 173 | 109 630 | 105 472 | 215 245 | -------------------------------------------------------------------------------- | Cost of goods sold | -51 762 | -48 098 | -103 485| -98 350 | -202 738 | | | | | | | | -------------------------------------------------------------------------------- | GROSS PROFIT | 3 406 | 3 075 | 6 145 | 7 122 | 12 507 | -------------------------------------------------------------------------------- | Other operating income | 341 | 345 | 510 | 820 | 1 438 | -------------------------------------------------------------------------------- | Sales and marketing | -797 | -967 | -1 635 | -2 012 | -3 643 | | expenses | | | | | | -------------------------------------------------------------------------------- | Research and development | -523 | -521 | -1 062 | -956 | -2 121 | -------------------------------------------------------------------------------- | Administration expenses | -1 821 | -1 448 | -3 446 | -3 140 | -6 300 | -------------------------------------------------------------------------------- | Other operating expenses | 12 | -30 | -19 | -130 | -228 | -------------------------------------------------------------------------------- | OPERATING PROFIT BEFORE | 618 | 454 | 493 | 1 704 | 1 653 | | GOODWILL AMORTISATION | | | | | | -------------------------------------------------------------------------------- | Goodwill amortisation | | | | | -8 430 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 618 | 454 | 493 | 1 704 | -6 777 | -------------------------------------------------------------------------------- | Interest and other | -1 200 | -899 | -2 284 | -1 844 | -3 922 | | financial income and | | | | | | | expenses | | | | | | -------------------------------------------------------------------------------- | Fair value gains and | | 2 | | 8 | 4 | | losses | | | | | | -------------------------------------------------------------------------------- | PROFIT BEFORE INCOME | -582 | -443 | -1 791 | -132 | -10 695 | | TAXES | | | | | | -------------------------------------------------------------------------------- | Income taxes | 155 | 113 | 464 | 33 | 564 | -------------------------------------------------------------------------------- | PROFIT/LOSS FOR THE | -427 | -330 | -1 327 | -99 | -10 131 | | PERIOD | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.02 | -0,01 | -0.06 | 0.00 | -0.43 | -------------------------------------------------------------------------------- KEY FIGURES ON STATEMENT OF INCOME -------------------------------------------------------------------------------- | | 4-6/ | 4-6/ | 1-6/ | 1-6/ | 1-12/ | | | 2008 | 2007 | 2008 | 2007 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, change, % * | 7.8 | | 3.9 | | | -------------------------------------------------------------------------------- | Gross profit, % ** | 6.2 | 6.0 | 5.6 | 6.8 | 5.8 | -------------------------------------------------------------------------------- | Operating profit, % ** | 1.1 | 0.9 | 0.4 | 1.6 | -3.1 | -------------------------------------------------------------------------------- | Financial income and | -2.2 | -1.8 | -2.1 | -1.7 | -1.8 | | expenses, % ** | | | | | | -------------------------------------------------------------------------------- | Profit before income | -1.1 | -0.9 | -1.6 | -0.1 | -5.0 | | taxes, % ** | | | | | | -------------------------------------------------------------------------------- | Profit for the period, % | -0.8 | -0.6 | -1.2 | -0.1 | -4.7 | | ** | | | | | | -------------------------------------------------------------------------------- * Compared with the corresponding period of the previous year. ** As of net sales. BALANCE SHEET -------------------------------------------------------------------------------- | EUR 1 000 | 6/2008 | 6/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Goodwill | 25 604 | 34 034 | 25 604 | -------------------------------------------------------------------------------- | Intangible non-current assets | 948 | 899 | 942 | -------------------------------------------------------------------------------- | Tangible non-current assets | 70 470 | 74 383 | 74 083 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 712 | 716 | 712 | -------------------------------------------------------------------------------- | Held-to-maturity investments | 100 | 100 | 100 | -------------------------------------------------------------------------------- | Deferred tax assets | 480 | 881 | 688 | -------------------------------------------------------------------------------- | Non-current assets, total | 98 314 | 111 013 | 102 129 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 32 906 | 30 280 | 30 765 | -------------------------------------------------------------------------------- | Trade receivables | 28 368 | 23 638 | 28 718 | -------------------------------------------------------------------------------- | Other current receivables | 7 166 | 9 716 | 8 873 | -------------------------------------------------------------------------------- | Income tax receivables | 579 | 811 | 841 | -------------------------------------------------------------------------------- | Cash at bank and in hand | 585 | 857 | 1 094 | -------------------------------------------------------------------------------- | Current assets, total | 69 604 | 65 302 | 70 291 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets, total | 167 918 | 176 315 | 172 420 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity | | | | -------------------------------------------------------------------------------- | Share capital | 11 860 | 11 860 | 11 860 | -------------------------------------------------------------------------------- | Share premium account | 24 681 | 24 681 | 24 681 | -------------------------------------------------------------------------------- | Fair value and other reserves | 2 571 | 1 693 | 1 661 | -------------------------------------------------------------------------------- | Translation differences | 1 675 | 748 | 1 202 | -------------------------------------------------------------------------------- | Other shareholders' equity | 5 526 | 16 798 | 6 903 | -------------------------------------------------------------------------------- | Shareholders' equity, total | 46 313 | 55 780 | 46 307 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 5 703 | 6 273 | 5 848 | -------------------------------------------------------------------------------- | Pension liabilities | | 262 | | -------------------------------------------------------------------------------- | Provisions | | 85 | | -------------------------------------------------------------------------------- | Capital loans | 8 000 | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 43 450 | 63 365 | 62 186 | -------------------------------------------------------------------------------- | Other non-current liabilities | | 12 | | -------------------------------------------------------------------------------- | Non-current liabilities, total | 57 153 | 69 997 | 68 034 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 44 117 | 25 286 | 34 933 | -------------------------------------------------------------------------------- | Provisions | 50 | 115 | 100 | -------------------------------------------------------------------------------- | Capital loans | 2 000 | 4 000 | 2 000 | -------------------------------------------------------------------------------- | Income tax liabilities | 250 | 846 | | -------------------------------------------------------------------------------- | Trade payables and other current | 18 035 | 20 291 | 21 046 | | liabilities | | | | -------------------------------------------------------------------------------- | Current liabilities, total | 64 452 | 50 538 | 58 079 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities, total | 121 605 | 120 535 | 126 113 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and liabilities, | 167 918 | 176 315 | 172 420 | | total | | | | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY -------------------------------------------------------------------------------- | EUR 1000 | Share | Share | Own | Trans | Fair | Actuar-| Re- | Total | | | capital| premi |shares |lation | value | ial | tained | | | | | um | |differ-| re- | gains | earn- | | | | | accou | | ences |serves | and | ings | | | | | nt | | | | losses | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | 11 860 | 24 681| -115 | 1 202 | 1 776 | 0 | 6 903 | 46 307 | | equity | | | | | | | | | | at 1 | | | | | | | | | | Jan. | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash | | | | | 1 096 | | | 1 096 | | flow | | | | | | | | | | hedges | | | | | | | | | -------------------------------------------------------------------------------- | Translat | | | | 528 | | | | 528 | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Deferred | | | | -55 | -285 | | | -340 | | taxes | | | | | | | | | -------------------------------------------------------------------------------- | Share-ba | | | | | | | 67 | 67 | | sed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | -69 | -69 | | changes | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | 0 | 473 | 811 | | -2 | 1 282 | | income | | | | | | | | | | recognis | | | | | | | | | | ed | | | | | | | | | | directly | | | | | | | | | | in | | | | | | | | | | equity | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | | | | -1 327 | -1 327 | | income | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | 0 | 0 | 0 | 473 | 811 | 0 | -1 329 | - 45 | | recognis | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expense | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Business | | | | | | | | | | transac- | | | | | | | | | | tions | | | | | | | | | | with | | | | | | | | | | sharehol | | | | | | | | | | d-ers | | | | | | | | | -------------------------------------------------------------------------------- | Conveyan | | | 99 | | | | -48 | 51 | | ce of | | | | | | | | | | own | | | | | | | | | | shares | | | | | | | | | -------------------------------------------------------------------------------- | Total | 11 860 |24 681 | -16 | 1 675 | 2 587 | 0 | 5 526 | 46 313 | | equity | | | | | | | | | | at 30 | | | | | | | | | | June | | | | | | | | | | 2008 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1 000| Share | Share | Own | Trans | Fair | Actuar | Re-tai | Total | | | capit | premi | shares|lation | value | -ial | ned | | | | al | um | |differ-| re-ser | gains | earn-i | | | | | accou | | ences | ves | and | ngs | | | | | nt | | | | losses | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total |11 860 |24 681 | -163 | 738 | 1 348 | 1 372 | 16 907 | 56 743 | | equity | | | | | | | | | | at 1 | | | | | | | | | | Jan. | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash | | | | | 619 | | | 619 | | flow | | | | | | | | | | hedges | | | | | | | | | -------------------------------------------------------------------------------- | Translat | | | | 12 | | | | 12 | | ion | | | | | | | | | | differen | | | | | | | | | | ces | | | | | | | | | -------------------------------------------------------------------------------- | Deferred | | | | -2 | -158 | 10 | | -150 | | taxes | | | | | | | | | -------------------------------------------------------------------------------- | Share-ba | | | | | | | 25 | 25 | | sed | | | | | | | | | | payments | | | | | | | | | -------------------------------------------------------------------------------- | Actuaria | | | | | | -44 | | -44 | | l gains | | | | | | | | | | and | | | | | | | | | | losses | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | 44 | 44 | | changes | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | 10 | 461 | -34 | 69 | 506 | | income | | | | | | | | | | recognis | | | | | | | | | | ed | | | | | | | | | | directly | | | | | | | | | | in | | | | | | | | | | equity | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | | | | -99 | -99 | | income | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total | 0 | 0 | 0 | 10 | 461 | -34 | -30 | 407 | | recognis | | | | | | | | | | ed | | | | | | | | | | income | | | | | | | | | | and | | | | | | | | | | expense | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Business | | | | | | | | | | transac- | | | | | | | | | | tions | | | | | | | | | | with | | | | | | | | | | sharehol | | | | | | | | | | d-ers | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | | | | | | | -1 420 | -1 420 | -------------------------------------------------------------------------------- | Conveyan | | | 47 | | | | 3 | 50 | | ce of | | | | | | | | | | own | | | | | | | | | | shares | | | | | | | | | -------------------------------------------------------------------------------- | Total |11 860 |24 681 | -116 | 748 | 1 809 | 1 338 | 15 460 | 55 780 | | equity | | | | | | | | | | at 30 | | | | | | | | | | June | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- CASH FLOW STATEMENT -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operations | | | | -------------------------------------------------------------------------------- | Operating profit | 493 | 1 704 | -6 777 | -------------------------------------------------------------------------------- | Total adjustments | 6 443 | 6 620 | 21 430 | -------------------------------------------------------------------------------- | Cash flow before change in working | 6 936 | 8 324 | 14 653 | | capital | | | | -------------------------------------------------------------------------------- | Change in working capital | -1 222 | -2 433 | -7 256 | -------------------------------------------------------------------------------- | Financial items | -2 036 | -2 232 | -3 852 | -------------------------------------------------------------------------------- | Taxes paid | -89 | 423 | -791 | -------------------------------------------------------------------------------- | Cash flow from operations before | 3 589 | 4 082 | 2 754 | | interest-bearing receivables | | | | -------------------------------------------------------------------------------- | Change in interest-bearing receivables | -449 | -1 658 | -5 | -------------------------------------------------------------------------------- | Cash flow from operations | 3 139 | 2 424 | 2 749 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | | | | -------------------------------------------------------------------------------- | Investments in tangible and intangible | -2 849 | -6 200 | -12 898 | | assets | | | | -------------------------------------------------------------------------------- | Proceeds from disposal of fixed assets | 683 | 1 511 | 1 634 | | and other proceeds | | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | -2 167 | -4 689 | -11 264 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financing | | | | -------------------------------------------------------------------------------- | Non-current loans drawn | | 6 000 | 18 371 | -------------------------------------------------------------------------------- | Repayments of non-current loans | -6 636 | -1 102 | -12 042 | -------------------------------------------------------------------------------- | Capital loans | 8 000 | | -2 000 | -------------------------------------------------------------------------------- | Foreign exchange profit or loss | 517 | | 522 | -------------------------------------------------------------------------------- | Dividends paid | | -1 420 | -1 420 | -------------------------------------------------------------------------------- | Change in current loans | -3 434 | -1 582 | 4 934 | -------------------------------------------------------------------------------- | Cash flow from financing | -1 553 | 1 896 | 8 365 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -580 | -368 | -150 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | 1-6/2008 | 1-6/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings/share, EUR | -0.06 | 0.00 | -0.43 | -------------------------------------------------------------------------------- | Equity/share, EUR | 1.95 | 2.36 | 1.96 | -------------------------------------------------------------------------------- | Cash flow from operations/share, EUR | 0.13 | 0.10 | 0.12 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | -5.8 | -0.4 | -18.8 | -------------------------------------------------------------------------------- | Return on invested capital (ROI), % | 0.7 | 2.4 | -4.5 | -------------------------------------------------------------------------------- | Equity ratio, % | 27.6 | 31.6 | 26.9 | -------------------------------------------------------------------------------- | Gearing, % | 207.3 | 160.6 | 210.5 | -------------------------------------------------------------------------------- | Gross investments, EUR 1 000 | 1 987 | 5 076 | 11 266 | -------------------------------------------------------------------------------- | Depreciation and impairment losses, EUR | 6 548 | 7 066 | 13 934 | | 1 000 | | | | -------------------------------------------------------------------------------- | Goodwill amortisation, EUR 1 000 | | | 8 430 | -------------------------------------------------------------------------------- SEGMENT REPORTING WIPES AND NONWOVENS -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/2008 | 1-6/2007 | Change % | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | -------------------------------------------------------------------------------- | - Wet Wipes | 35 886 | 33 482 | 7.2 | 70 032 | -------------------------------------------------------------------------------- | - Nonwovens | 41 668 | 37 020 | 12.6 | 76 970 | -------------------------------------------------------------------------------- | - eliminations | -5 530 | -3 491 | 58.4 | -9 413 | -------------------------------------------------------------------------------- | Total | 72 024 | 67 011 | 7.5 | 137 589 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit before | 198 | -134 | 247.8 | -359 | | goodwill amortisation | | | | | -------------------------------------------------------------------------------- | % of net sales | 0.3 | -0.2 | | -0.3 | -------------------------------------------------------------------------------- | Goodwill amortisation | | | | -8 430 | -------------------------------------------------------------------------------- | Operating profit | 198 | -134 | | -8 789 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 105 720 | 114 472 | | 108 295 | -------------------------------------------------------------------------------- | Liabilities | 10 799 | 12 498 | | 12 884 | -------------------------------------------------------------------------------- | Net assets | 94 921 | 101 974 | | 95 411 | -------------------------------------------------------------------------------- | Investments | 808 | 2 359 | | 4 379 | -------------------------------------------------------------------------------- | Depreciation and impairment | 3 823 | 4 284 | | 8 407 | | losses | | | | | -------------------------------------------------------------------------------- | Goodwill amortisation | | | | 8 430 | -------------------------------------------------------------------------------- | Average personnel | 460 | 471 | | 466 | -------------------------------------------------------------------------------- FLEXIBLE PACKAGING -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/2008 | 1-6/2007 | Change % | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 37 911 | 38 698 | -2.0 | 78 269 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 684 | 2 121 | -67.8 | 2 407 | -------------------------------------------------------------------------------- | % of net sales | 1.8 | 5.5 | | 3.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 58 315 | 56 970 | | 59 744 | -------------------------------------------------------------------------------- | Liabilities | 9 257 | 8 646 | | 9 896 | -------------------------------------------------------------------------------- | Net assets | 49 058 | 48 324 | | 49 848 | -------------------------------------------------------------------------------- | Investments | 1 146 | 2 716 | | 6 852 | -------------------------------------------------------------------------------- | Depreciation and impairment | 2 702 | 2 758 | | 5 481 | | losses | | | | | -------------------------------------------------------------------------------- | Average personnel | 579 | 597 | | 593 | -------------------------------------------------------------------------------- CONSOLIDATION ITEMS -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | -305 | -237 | -613 | -------------------------------------------------------------------------------- | Operating profit | -389 | -283 | -395 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | 3 883 | 4 873 | 4 381 | -------------------------------------------------------------------------------- | Liabilities | 101 549 | 99 389 | 103 333 | -------------------------------------------------------------------------------- | Investments | 33 | 1 | 35 | -------------------------------------------------------------------------------- | Depreciation and impairment losses | 23 | 24 | 46 | -------------------------------------------------------------------------------- | Average personnel | 12 | 11 | 11 | -------------------------------------------------------------------------------- NET SALES BY MARKET AREA -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/2008 | 1-6/2007 | 1-12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finland | 17 486 | 16 901 | 34 139 | -------------------------------------------------------------------------------- | Scandinavia | 9 403 | 11 100 | 22 032 | -------------------------------------------------------------------------------- | The Netherlands | 8 990 | 9 572 | 19 022 | -------------------------------------------------------------------------------- | Other Europe | 58 218 | 47 968 | 104 539 | -------------------------------------------------------------------------------- | Other countries | 15 533 | 19 931 | 35 513 | -------------------------------------------------------------------------------- | Net sales, total | 109 630 | 105 472 | 215 245 | -------------------------------------------------------------------------------- QUARTERLY FIGURES -------------------------------------------------------------------------------- | EUR 1 000 | III/2007 | IV/2007 | I/2008 | II/2008 | III/2007- | | | | | | | II/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET SALES | | | | | | -------------------------------------------------------------------------------- | Wipes and Nonwovens | | | | | | -------------------------------------------------------------------------------- | - Wet Wipes | 17 774 | 18 776 | 18 507 | 17 379 | 72 436 | -------------------------------------------------------------------------------- | - Nonwovens | 21 370 | 18 580 | 20 559 | 21 109 | 81 618 | -------------------------------------------------------------------------------- | - eliminations | -2 643 | -3 280 | -3 564 | -1 966 | -11 453 | -------------------------------------------------------------------------------- | Total | 36 501 | 34 076 | 35 502 | 36 522 | 142 601 | -------------------------------------------------------------------------------- | Flexible Packaging | 19 408 | 20 163 | 19 094 | 18 817 | 77 482 | -------------------------------------------------------------------------------- | Consolidation items | -208 | -168 | -134 | -171 | -681 | | and eliminations | | | | | | -------------------------------------------------------------------------------- | Net sales, total | 55 701 | 54 071 | 54 462 | 55 168 | 219 402 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT | | | | | | -------------------------------------------------------------------------------- | Wipes and Nonwovens | 559 | -784 | -97 | 295 | -27 | -------------------------------------------------------------------------------- | % of net sales | 1.5 | -2.3 | -0.3 | 0.8 | 0.0 | -------------------------------------------------------------------------------- | Flexible Packaging | 52 | 234 | 175 | 509 | 970 | -------------------------------------------------------------------------------- | % of net sales | 0.3 | 1.2 | 0.9 | 2.7 | 1.3 | -------------------------------------------------------------------------------- | Consolidation items | -66 | -46 | -203 | -186 | -501 | | and eliminations | | | | | | -------------------------------------------------------------------------------- | Operating profit | 545 | -596 | -125 | 618 | 442 | | before goodwill | | | | | | | amortisation | | | | | | -------------------------------------------------------------------------------- | % of net sales | 1.0 | -1.1 | -0.2 | 1.1 | 0.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Goodwill | | -8 430 | | | -8 430 | | amortisation | | | | | | -------------------------------------------------------------------------------- | Operating profit, | 545 | -9 026 | -125 | 618 | -7 988 | | total | | | | | | -------------------------------------------------------------------------------- | % of net sales | 1.0 | -16.7 | -0.2 | 1.1 | -3.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET FINANCIAL | -1 046 | -1 036 | -1 084 | -1 200 | -4 366 | | EXPENSES | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROFIT BEFORE | -501 | -10 062 | -1 209 | -582 | -12 354 | | INCOME TAXES | | | | | | -------------------------------------------------------------------------------- TAXES FOR THE PERIOD UNDER REVIEW Taxes for the period under review are calculated on the basis of the Group's tax rate for the whole year, which is estimated to be 26 per cent in 2008 (25 per cent in 2007). INFORMATION ON RELATED PARTIES Suominen has related party relationships with the members of the Board of Directors, and the members of the Corporate Executive Team. The Company has no investments in associated companies. Salaries paid to the related parties amounted to EUR 443 thousand, share-based payments EUR 67 thousand, and unsecured loans EUR 1 100 thousand. MOVEMENTS IN BORROWINGS -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/2008 | 1-6/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 1 January | 99 119 | 89 335 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current loans from financial institutions on 1 | 3 000 | 8 000 | | January | | | -------------------------------------------------------------------------------- | Change in current loans from financial institutions | -3 000 | -8 000 | -------------------------------------------------------------------------------- | Current loans from financial institutions on 30 | 0 | 0 | | June | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Commercial papers on 1 January | 15 336 | 5 402 | -------------------------------------------------------------------------------- | Change in commercial papers | -433 | 6 418 | -------------------------------------------------------------------------------- | Commercial papers on 30 June | 14 903 | 11 820 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current loans on 1 January | 78 783 | 71 933 | -------------------------------------------------------------------------------- | Change in non-current loans | -6 119 | 4 898 | -------------------------------------------------------------------------------- | Non-current loans on 30 June | 72 664 | 76 831 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Capital loans on 1 January | 2 000 | 4 000 | -------------------------------------------------------------------------------- | Change in capital loans | 8 000 | | -------------------------------------------------------------------------------- | Capital loans on 30 June | 10 000 | 4 000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total borrowings on 30 June | 97 567 | 92 651 | -------------------------------------------------------------------------------- CHANGES IN FIXED ASSETS -------------------------------------------------------------------------------- | EUR 1 000 | 1-6/ | | 1-6/ | | 1-12/ | | | | 2008 | | 2007 | | 2007 | | -------------------------------------------------------------------------------- | | Tangible | Intan- | Tangible | Intan- | Tangible | Intan- | | | | gible | | gible | | gible | -------------------------------------------------------------------------------- | Book value at | 74 083 | 942 | 77 168 | 944 | 77 168 | 944 | | the beginning | | | | | | | | of the period | | | | | | | -------------------------------------------------------------------------------- | Investments | 1 850 | 137 | 5 040 | 36 | 11 087 | 179 | -------------------------------------------------------------------------------- | Decreases | -81 | | -906 | -16 | -1 600 | | -------------------------------------------------------------------------------- | Depreciation | -6 414 | -134 | -6 964 | -102 | -13 730 | -203 | | and | | | | | | | | impairments | | | | | | | -------------------------------------------------------------------------------- | Translation | 1 032 | 3 | 45 | 37 | 1 158 | 22 | | differences | | | | | | | | and other | | | | | | | | changes | | | | | | | -------------------------------------------------------------------------------- | Book value at | 70 470 | 948 | 74 383 | 899 | 74 083 | 942 | | the end of | | | | | | | | the period | | | | | | | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR 1 000 | 6/2008 | 6/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FOR OWN DEBT | | | | -------------------------------------------------------------------------------- | Real estate mortgages | 5 045 | 5 045 | 5 045 | -------------------------------------------------------------------------------- | Corporate mortgages | | 1 177 | 1 177 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OTHER OWN COMMITMENTS | | | | -------------------------------------------------------------------------------- | Leasing payments and commitments | 8 527 | 8 372 | 8 033 | -------------------------------------------------------------------------------- | Rent commitments | 12 546 | 14 397 | 14 003 | -------------------------------------------------------------------------------- | Guarantee commitment for financial | 1 513 | 1 600 | 1 557 | | lease of discontinued operations | | | | -------------------------------------------------------------------------------- NOMINAL AND FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS -------------------------------------------------------------------------------- | EUR 1 000 | 6/2008 | 6/2007 | 12/2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CURRENCY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 7 277 | 9 584 | 10 724 | -------------------------------------------------------------------------------- | Fair value | 119 | -15 | 69 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INTEREST RATE DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 68 700 | 66 334 | 65 667 | -------------------------------------------------------------------------------- | Fair value | 1 389 | 1 505 | 1 123 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ELECTRICITY DERIVATIVES | | | | -------------------------------------------------------------------------------- | Nominal value | 3 698 | 5 239 | 4 683 | -------------------------------------------------------------------------------- | Fair value | 2 169 | 950 | 1 337 | -------------------------------------------------------------------------------- Helsinki, 18 July 2008 SUOMINEN CORPORATION Board of Directors For addition information please contact: Mr. Petri Rolig, President and CEO, tel. +358 (0)10 214 300 Mr. Arto Kiiskinen, Vice President and CFO, tel. +358 (0)10 214 300interim-18-07-2008.pdf
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