Dienstag, 27.10.2020 08:30 von GlobeNewswire | Aufrufe: 294

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

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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.

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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).

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