Suominen Oyj · OMXHEX:SUY1V
Suominen Oyj — FY2006 Earnings Presentation
27 slides from Suominen Oyj's earnings presentation, Feb 12, 2007
Slide 1: Suominen Corporation Financial Statements 1 January - 31 December 2006
SUOMINEN CORPORATION Financial Statements 1 January - 31 December 2006 Presentation 12 February 2007
Slide 2: Performance
Performance Kalle Tanhuanpää, President and CEO
Slide 3: 2006 highlights
2006 highlights EUR million * Q4 2006 Q4 2005 2006 2005 Net sales 54.2 44.6 202.6 195.2 Operating profit 0.8 -1.3 1.2 -3.1 Net result -0.1 -1.6 -1.8 -4.7 EPS, EUR 0.00 -0.07 -0.08 -0.20 *Continuing operations • Net sales up by 4 % thanks to strong sales in Q4. • Performance continued to improve, but
Slide 4: Positive sales trend
Positive sales trend • Q4 net sales up from last year and NET SALES preceding quarters. €M €M • Net sales for total year grew by 4 % 100 210 90 thanks to better demand and new 80 180 product projects. 70 150 60 120 • Sales grew in all three units in the 50 second half of the year. 40 90 30 60 20 30
Slide 5: Profit improvement continued
Profit improvement continued • Improved cost base. €M OPERATING PROFIT €M • Kauhava closure, EUR 0.7 million, million burdened the last quarter. 3 4 • Production was lower than sales, 2 2 which lowered profit but improved 1 cash-flow. 0 0 • Costs of energy, electricity and I II III IV CUM -1 freight
Slide 6: Operating profit vs. raw material prices
Operating profit vs. raw material prices • RM-escalators work with delay (3 - 6 months). EUR 1 000 EUR 1,30 1 800 1 500 1 200 900 1,20 600 300 0 1,10 -300 I/2005 II III IV I/2006 II III IV -600 -900 -1 200 1,00 RM price indicator rhs Kauhava non-recurring cost
Slide 7: Actions and programs 2006
Actions and programs 2006 • Cost savings program amounted to EUR 6 million. • Improved sales price management. • The production of Kauhava plant smoothly transferred to other units. Calculated annual savings will be EUR 0.5 million. • Solid fuel plant in Nakkila will lower energy costs by more than
Slide 8: Initiatives 2006
Initiatives 2006 • Enlargement of printing capacity in Poland started. New press on stream next summer. • Development of key processes organised to focus on internal synergies, efficiency and savings. • As a part of the strategy work, Stairs to Top - efficiency and business enhancement program launc
Slide 9: Operating cash flow
Operating cash flow • Cash flow from operations clearly CASH FLOW BEFORE INTEREST AND TAX better than 2005. €M €M • Low level of investments helped to 19 19 reduce debt. 15 15 11 11 7 7 3 3 -1 I II III IV CUM -1 2006 2005 FY 2006 rhs FY 2005 rhs
Slide 10: Breakdown of net sales 1-12/2006
Breakdown of net sales 1 - 12/2006 EUR 202.6 million Flexible Packaging EUR 76.0 million 38 % Wet Wipes 34 % Nonwovens 28 % Wipes and Nonwovens EUR 126.9 million
Slide 11: Wipes and Nonwovens - Sales starting to move up
Wipes and Nonwovens - Sales starting to move up • Net sales in Q4 grew strongly. €M NET SALES €M • Net sales 3 % higher than in 2005. Sales in Wet Wipes up by 7 %. 50 140 120 • Growth both in baby and personal 40 100 care wet wipes. 30 80 • New product projects in Wet Wipes 60 on stream in the secon
Slide 12: Wipes and Nonwovens - Q4 operating profit turned black
Wipes and Nonwovens - Q4 operating profit turned black • Higher sales volume improved OPERATING PROFIT profitability. €M €M • As planned, cost savings achieved, 2 4 and number of personnel down by 100. 1 2 • Higher utilisation of automatic lines 0 0 in Wet Wipes boosted efficiency. I II III IV CUM •
Slide 13: Flexible Packaging - Sales growth in value added products
Flexible Packaging - Sales growth in value added products • Net sales in Q4 up by 8 %. €M NET SALES €M • Net sales for 2006 up by 6 % thanks to improved average prices. 30 80 • Growth was high in hygiene and 60 food sectors. 20 • Share of international sales grew to 40 62 %. 10 • Production in Polan
Slide 14: Flexible Packaging - Changes in structure
Flexible Packaging - Changes in structure • Average margin up as a result of OPERATING PROFIT improved product mix. €M €M • Prices for raw materials peaked in 2 3 Q4. 2 1 • A number of efficiency initiatives 1 successfully launched. 0 0 • Nonrecurring costs of EUR 0.7 I II III IV CUM million for 200
Slide 15: Outlook
Outlook • Net sales for 2007 are expected to grow from 2006, and profit for the financial year is expected to turn positive. • Sales growth is based on the forecasts provided by customers and on our own estimates. • Profitability is expected to improve thanks to planned cost savings, better operatio
Slide 16: Financial targets
Financial targets The Board of Directors has established a set of new financial targets for Suominen between 2007and 2009: To achieve an To raise the size To gradually average annual To gradually of the dividend, increase growth in net reduce gearing and ensure the operating profit sales of more to
Slide 17: 2007
2007 • The Kauhava premises were sold • Extension of Flexible Packaging’s Polish plant
Slide 18: Financials
Financials Arto Kiiskinen, CFO
Slide 19: P&L in brief
P&L in brief EUR million Q4 2006 Q4 2005 FY 2006 FY 2005 Net sales 54.2 44.6 202.6 195.2 Operating profit 0.8 -1.3 1.2 -3.1 Profit before taxes -0.3 -2.1 -2.7 -6.8 Profit/loss for the period -0.1 -1.6 -1.8 -3.7
Slide 20: Cash flow
Cash flow €M 25 EUR million 2006 2005 Cash flow from operations 12.5 0.1 20 Cash flow from investing -2.5 -1.9 15 activities 10 Cash flow from financing -10.0 0.6 5 Change in cash and cash equivalents 0.1 -1.2 0 2002 2003 2004 2005 2006 Operating cash flow Investment cash flow
Slide 21: Financial gearing
Financial gearing €M 180 2006 2005 160 Equity ratio, % 32.3 31.2 140 120 Gearing, % 154.4 167.6 100 Net debt to adjusted 80 capital ratio, % 60.7 62.7 60 40 20 0 2002 2003 2004 2005 2006 Gearing, %
Slide 22: Interest bearing debt
Interest bearing debt €M % 120 2,5 2006 2005 100 2 Interest bearing debt 89.3 99.1 80 Financial income 1,5 and expence 3.9 3.7 60 1 40 0,5 20 0 0 2002 2003 2004 2005 2006 Interest bearing debt (lhs) Financial items, % of net sales (rhs)
Slide 23: Net sales by business area
Net sales by business area EUR million 2006 2005 Wipes and Nonwovens - Wet Wipes 69.3 64.9 - Nonwovens 67.3 67.5 - eliminations -9.7 -8.9 Total 126.9 123.4 Flexible Packaging 76.0 71.8 Consolidation items and eliminations -0.3 -0.1 Net sales, continuing operations, total 202.6 195.2
Slide 24: Earnings by business area
Earnings by business area EUR million 2006 2005 Wipes and Nonwovens -0.1 -3.5 Flexible Packaging 2.0 0.1 Consolidation items and eliminations -0.7 0.3 Operating profit from continuing operations 1.2 -3.1
Slide 25: Wipes and Nonwovens - Segment information
Wipes and Nonwovens - Segment information EUR million 2006 2005 Net sales 126.9 123.4 Operating profit -0.1 -3.5 Personnel, average 455 532 Net assets 102.8 111.6 Investments 2.2 4.9
Slide 26: Flexible Packaging - Segment information
Flexible Packaging - Segment information EUR million 2006 2005 Net sales 76.0 71.8 Operating profit 2.0 0.1 Personnel, average 593 607 Net assets 43.9 51.7 Investments 2.1 2.8
Slide 27: Key figures
Key figures 2006 2005 Earnings/share, EUR -0.08 -0.15 Equity/share, EUR 2.40 2.44 Cash flow from operations/share, EUR 0.53 0.01 Return on equity, % (ROE) -3.1 -6.2 Return on invested capital, % (ROI) 0.9 -0.8 Equity ratio, % 32.3 31.2 Equity ratio, %, capital loans in equity 34.6 34.4 Gearing, % 15