Suominen Corporation’s Interim Report for January 1 – March 31, 2025: Navigating a challenging environment

Suominen Corporation’s Interim Report on May 7, 2025, at 9:30 a.m. (EEST)

Suominen Corporation’s Interim Report for January 1 – March 31, 2025:

Navigating a challenging environment

KEY FIGURES

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

January–March 2025 in brief:

• Net sales increased by 3.4% and amounted to EUR 117.5 million (113.6)

• Comparable EBITDA decreased to EUR 4.1 million (4.5)

• Cash flow from operations was EUR -0.4 million (-2.2)
  
  

Outlook for 2025

Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2025 will increase from 2024. In 2024, Suominen’s comparable EBITDA was EUR 17.0 million.

Tommi Björnman, President & CEO:

“The market remained volatile in the first quarter of 2025, making for a challenging start to the year. Global supply chains are being impacted by geopolitical uncertainty, particularly around tariffs, prompting stakeholders to take precautionary measures. Stock levels for Asian-imported goods are increasing across both of our business areas. Despite a decline in consumer confidence, demand for our products remained stable during the first quarter of the year.

In the first quarter our net sales reached EUR 117.5 million (113.6). While our sales volumes were lower than in the comparison period, higher raw material prices, improved sales mix and strong commercial execution led to increased sales prices. Notably, 27% of our net sales in the quarter came from new products launched in the last three years, demonstrating our ability to innovate and meet market needs.

Our quarterly comparable EBITDA decreased to EUR 4.1 million (4.5) primarily due to higher operating expenses.

Sustainability is integral to our strategy and a key factor in our long-term success. We are committed to being the frontrunner in sustainable nonwovens and our innovation work is strongly focused on developing more sustainable nonwoven solutions that meet our customers' needs. In March, we published our new sustainability agenda for the period 2025–2030. The most important topics for us and our stakeholders are People and safety, Sustainable nonwovens, Low impact manufacturing and Corporate citizenship. The KPI’s presented in the agenda reflect our commitment to sustainability and help us measure our impact as well as drive meaningful change.

Last year, we announced two large investments, in Spain and in the USA, to enhance our capabilities in sustainable products. These projects, totaling approximately EUR 30 million, are progressing as planned.”

NET SALES

In the first quarter our net sales reached EUR 117.5 million (113.6), an increase of 3.4% from the comparison period. While our sales volumes were lower than in the comparison period, higher raw material prices, an improved sales mix and strong commercial execution led to increased sales prices. Additionally, currency fluctuations had a positive impact on net sales, contributing EUR 0.9 million.

Suominen has two business areas, Americas and EMEA. Net sales of the Americas business area were EUR 73.6 million (70.0) and net sales of the EMEA business area were EUR 43.9 million (43.5).

EBITDA, OPERATING PROFIT AND RESULT

Comparable EBITDA (earnings before interest, taxes, depreciation and amortization) decreased to EUR 4.1 million (4.5) primarily due to higher operating expenses. The negative impact from currency fluctuations on EBITDA was EUR 0.5 million. There were no items affecting comparability in the first quarter of 2025 (EUR +0.2 million in 2024, related to the closure of the Mozzate plant in Italy). EBITDA was EUR 4.1 million (4.7).

Comparable operating profit decreased to EUR -0.3 million (-0.1). Operating profit was EUR -0.3 million (0.1). There were no items affecting comparability of EBIT in 2025 (EUR +0.2 million in 2024, related to the closure of the Mozzate plant in Italy).

Result before income taxes was EUR -2.2 million (-0.7), and result for the reporting period was EUR
-2.2 million (-1.0).

FINANCING

The Group’s net interest-bearing liabilities at nominal value amounted to EUR 67.4 million (49.2) at the end of the review period. The gearing ratio was 60.0% (39.0%) and the equity ratio 37.2% (39.6%).

In January–March, net financial expenses were EUR -1.9 million (-0.8), or -1.6% (-0.7%) of net sales. Fluctuations in exchange rates increased the net financial items by EUR 0.6 million. In the comparison period the fluctuations in exchange rates decreased the net financial items by EUR 0.4 million.

Cash flow from operations was EUR -0.4 million (-2.2), representing a cash flow per share of EUR -0.01 (-0.04). EUR 2.8 million was tied in working capital (in Q1 2024: EUR 5.8 million was tied in working capital). The improvement in the working capital was mainly in inventories and receivables.

CAPITAL EXPENDITURE

The gross capital expenditure totaled to EUR 5.8 million (2.0) and the largest investments were related to the growth investment initiatives in Bethune, USA and Alicante, Spain. Other investments were mainly for maintenance.

Depreciation and amortization for the review period amounted to EUR 4.4 million (4.6). There were no impairment losses in 2025 (EUR 0.0 million in 2024).

PROGRESS IN SUSTAINABILITY

Suominen provided a detailed overview of its sustainability performance in the Sustainability Statement published on April 1 as part of the Report by the Board of Directors published in Suominen’s Annual Report 2024. The Sustainability Statement was prepared in accordance with the Finnish Accounting Act, European Sustainability Reporting Standards (ESRS) and EU Taxonomy regulation.

In March 2025, Suominen released its Sustainability Agenda for 2025–2030, outlining key sustainability themes and targets. The agenda focuses on four main themes: People and safety, Sustainable nonwovens, Low impact manufacturing and Corporate citizenship. These themes are based on Suominen’s double materiality assessment completed in 2024, reaffirming their relevance from the previous agenda period (2020–2025).

Suominen prioritizes safety and accident prevention, aiming for zero lost time accidents (LTA). One LTA occurred in the first quarter at Suominen sites. Another goal is to achieve a diversity, equity, and inclusion (DEI) index of 80% by 2030.

We are committed to improving production efficiency and resource utilization, targeting reductions in scope 1, 2, and 3 greenhouse gas emissions in line with the Paris Agreement (limiting global warming to 1.5°C), and achieving zero manufacturing waste to landfill by 2030.

Our portfolio includes sustainable nonwovens, and we continuously develop innovative solutions with reduced environmental impact. We aim for over two-thirds of our consumed raw materials to be from plant-based resources and for more than half of our new R&D initiatives to focus on advancing the development of sustainable products.

We promote responsible business practices and transparent communication. Our goals include assessing all qualified raw material suppliers against Suominen’s sustainability criteria and training all employees in Suominen’s sustainability program.

Suominen will report its progress towards these goals for the first time in 2026.

INFORMATION ON SHARES AND SHARE CAPITAL

Share capital

The number of Suominen’s registered shares was 58,259,219 shares on March 31, 2025, 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 March 31, 2025, was 208,458 shares, accounting for 0.4% of the average number of shares (excluding treasury shares). The highest price was EUR 2.73, the lowest EUR 1.91 and the volume-weighted average price EUR 2.18. The closing price at the end of review period was EUR 2.03. The market capitalization (excluding treasury shares) was EUR 117.2 million on March 31, 2025.

Treasury shares

On March 31, 2025, Suominen Corporation held 532,116 treasury shares.

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 April 25, 2025, decided that 75% of the annual remuneration of the members of the Board of Directors is paid in cash and 25% in Suominen Corporation’s shares.

The shares will be transferred out of the treasury shares held by the company by the decision of the Board of Directors within two weeks from the date on which the interim report of January–March 2025 of the company is published.

Share-based incentive plans for the management and key employees

The Group management and key employees participate in the company’s share-based long-term incentive plans. The plans are described in more detail in the Financial Statements and in the Remuneration Report, available on the company’s website www.suominen.fi.

Company's Performance Share Plan currently includes three 3-year performance periods, calendar years 2023–2025, 2024–2026 and 2025–2027. The aim of the Performance Share 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.

Suominen announced on January 27, 2025, that the Board of Directors of Suominen Corporation has decided on the commencement of a new long-term incentive plan period covering the years 2025–2027 for management and key employees.

The performance criteria of the performance period 2025–2027 are tied to Absolute Total Shareholder Return (weight 40%) covering the years 2025–2027, Relative Total Shareholder Return (weight 40%) covering the years 2025–2027, and operative performance and sustainability goal (weight 20%) covering the year 2025 and measuring the company’s target to improve its raw material efficiency.

The value of the rewards to be paid on the basis of the plan corresponds to a maximum total of 1,375,431 shares of Suominen, including also the proportion to be paid in cash. The target group in the performance period 2025–2027 consists of 27 key employees, including the President & CEO and other members of the Executive Management Team.

Performance Share Plan: Ongoing performance periods

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.

The President & CEO’s share-based incentive plan

The aim of the plan is to align the objectives of the shareholders and the President & CEO in order to increase the value of Suominen in the long-term, to retain the President & CEO at the company, and to offer him a competitive reward plan that is based on acquiring, receiving and accumulating the company's shares.

Under the plan the President & CEO is expected to own or acquire up to 30,000 shares of Suominen Corporation at a price formed in public trading on Nasdaq Helsinki. Suominen will match the share investment by way of the President & CEO receiving, without consideration, up to 60,000 matching shares (gross, including also the proportion to be paid in cash).

The remaining vesting periods are June 1, 2023–June 1, 2025, and June 1, 2023–June 1, 2026. The potential reward will be paid partly in shares and partly in cash in three equal installments after each vesting period, provided that the President & CEO’s service in the company is in force at the time of the reward payment. The cash proportion is intended to cover taxes and tax-related costs arising from the rewards to the President & CEO.

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.

CHANGES IN THE EXECUTIVE TEAM

Minna Rouru started in January 2025, as Chief People & Communications Officer at Suominen.

Mark Ushpol started in January 2025 as EVP, Americas business area at Suominen.

Darryl Fournier started in February 2025 as Chief Operating Officer at Suominen.

All new members of Suominen's Executive Management Team report to President & CEO Tommi Björnman.

SHORT TERM RISKS AND UNCERTAINTIES

The market remained volatile in the first quarter of 2025, making for a challenging start to the year. Global supply chains are being impacted by geopolitical uncertainty, particularly around tariffs, prompting stakeholders to take precautionary measures. Stock levels for Asian-imported goods are increasing across both of our business areas. Despite a decline in consumer confidence, demand for our products remained stable during the first quarter of the year

The ongoing war in Ukraine has no direct impact on Suominen’s business, as the company does not have customers or suppliers in Russia, Belarus, or Ukraine. Suominen is primarily affected by the indirect economic impacts of the conflict. The situation in the Red Sea has temporarily increased sea freight costs.

Suominen’s other risks and uncertainties include but are not limited to: risks related to manufacturing, competition, raw material prices and availability, 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 2024 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 the 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.

We follow closely market development and signals from our customers, but the overall global economic uncertainty and fierce competition continue to make the longer-term visibility challenging. It remains to be seen how the current economic climate impacts the end consumer demand and consumer preferences regarding wipes. Historically, the wipes market has been rather steady despite the general economic situation.

Geopolitical tensions, instabilities in the Middle East and the war in Ukraine continue to generate uncertainty globally. Possible impacts to Suominen as a company are expected to be mainly indirect. However, possible effects on supply chain, especially on raw material and logistic costs, would impact Suominen directly. We continue to monitor the situation.

OUTLOOK FOR 2025

Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2025 will increase from 2024. In 2024, Suominen’s comparable EBITDA was EUR 17.0 million.

EVENTS AFTER THE REPORTING PERIOD

Annual General Meeting (April 25, 2025)

The AGM adopted the Financial Statements for 2024 and discharged the members of the Board of Directors and the President and CEO from liability for the financial year 2024.

The AGM resolved to adopt the Remuneration Report for the Company’s governing bodies for 2024. The resolution made by the AGM is advisory.

The AGM decided, in accordance with the proposal by the Board of Directors, that no dividend be paid based on the adopted balance sheet regarding the financial year 2024 and that the distributable funds be left in the company’s unrestricted equity.

The AGM decided, in accordance with the proposal of the Shareholders’ Nomination Board, that the remuneration of the Board of Directors remains unchanged and is as follows: the Chair is paid an annual fee of EUR 74,000, the Deputy Chair an annual fee of EUR 45,000 and other Board members an annual fee of EUR 35,000. The Chair of the Audit Committee is 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 500 for each meeting attended by telephone or other electronic means.

75% of the annual fee is paid in cash and 25% 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 will be seven (7). Andreas Ahlström, Björn Borgman, Charles Héaulmé, Nina Linander and Laura Remes were re-elected as members of the Board by the AGM. Gail Ciccione and Maija Joutsenkoski were elected as new members of the Board.

Charles Héaulmé was re-elected as the Chair of the Board of Directors.

Authorised Public Accountants KPMG Oy Ab was elected as the auditor of the company for the next term of office in accordance with the Articles of Association. KPMG Oy Ab has informed that Anders Lundin, APA, ASA, will act as the principally responsible auditor of the company. The auditor’s fee was resolved to be paid according to the invoice approved by the company.

Sustainability audit firm KPMG Oy Ab was elected as the company’s authorised sustainability auditor for a term that lasts until the end of the company's next Annual General Meeting. KPMG Oy Ab has informed that Anders Lundin, APA, ASA, will act as the responsible authorised sustainability auditor of the company. The authorised sustainability auditor’s fee was resolved to be paid according to the invoice approved by the company.

Suominen published a stock exchange release on April 25, 2025 concerning the resolutions of the Annual General Meeting and the organizing meeting of the Board of Directors. The stock exchange release and introductions of the new Board members can be viewed on Suominen’s website at www.suominen.fi.

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 the Deputy Chair of the Board.

The Board elected from among its members the members for the Audit Committee, Personnel and Remuneration Committee, and Strategy Committee. Nina Linander was re-elected as the Chair of the Audit Committee, and Andreas Ahlström and Laura Remes were re-elected as members. Maija Joutsenkoski was elected as a new member. Charles Héaulmé was re-elected as the Chair of the Personnel and Remuneration Committee, and Björn Borgman was re-elected as a member. Gail Ciccione was elected as a new member. Laura Remes was re-elected as the Chair of the Strategy Committee, and Andreas Ahlström was re-elected as a member. Maija Joutsenkoski was elected as a new member.

Authorizations of the Board of Directors

The Board of Directors was authorized to decide on the repurchase of a maximum of 1,000,000 of the company’s own shares. The company’s own shares shall be repurchased otherwise than in proportion to the holdings of the shareholders through trading on the regulated market organized by Nasdaq Helsinki Ltd at the market price prevailing at the time of acquisition using the company’s unrestricted equity. The shares shall be repurchased to be used in the company’s share-based incentive programs, in order to disburse the remuneration of the members of the Board of Directors, to be used 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 is valid until June 30, 2026, and it revokes all earlier authorizations to repurchase company’s own shares.

The Board of Directors was authorized to decide on the issuance of new shares, conveyance of the company’s own shares held by the company and/or granting of option rights and other special rights entitling to shares referred to in Chapter 10, Section 1 of the Finnish Companies Act. By virtue of the authorization, the Board of Directors may, by one or several resolutions, issue a maximum of 5,000,000 shares. The shares granted by virtue of option rights and other special rights are included in the aforementioned maximum number. Option rights and other special rights may not be granted as a part of the company’s remuneration system.

The share issue can be made either against payment or without payment and can also be directed to the company itself. The authorization entitles the Board of Directors to also decide that shares are issued otherwise than in proportion to the shareholdings of the shareholders (directed share issue). The authorization can be used to carry out acquisitions or other arrangements related to the company’s business, to finance investments, to improve the company’s financial structure, as part of the company’s remuneration system or to pay the share proportion of the remuneration of the members of the Board of Directors or for other purposes decided by the Board of Directors.

The authorization revokes all earlier authorizations regarding the issuance of shares and issuance of option rights and other special rights entitling to shares. The Board of Directors will decide on all other terms and conditions related to the authorization. The authorization is valid until June 30, 2026.

CORPORATE GOVERNANCE STATEMENT AND REMUNERATION REPORT

Suominen has prepared a separate Corporate Governance Statement and a Remuneration Report for 2024, which comply with the recommendations of the Finnish Corporate Governance Code for listed companies. The statements have been published on Suominen's website at www.suominen.fi

AUDIOCAST AND CONFERENCE CALL

Tommi Björnman, President & CEO, and Janne Silonsaari, CFO, will present the result in English in an audiocast and a conference call for analyst, investors, and media on the same day at 11:00 a.m. (EEST). The audiocast can be followed at https://suominen.events.inderes.com/q1-2025. The recording of the audiocast and the presentation material will be available after the event at www.suominen.fi.

Conference call participants can access the teleconference by registering at https://palvelu.flik.fi/teleconference/?id=5004238. The phone numbers and a conference ID to access the conference will be provided after the registration.

NEXT FINANCIAL REPORT

Suominen Corporation will publish its Half Year Report 2025 on August 7, 2025, approximately at 9:30 a.m. (EEST).

SUOMINEN GROUP 1.1–31.3.2025

The figures in these interim financial statements 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 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 2024, with the exception of the effect of the new accounting standards and interpretations which have been applied from January 1, 2025.

The new or amended standards or interpretations applicable from January 1, 2025, are not material for Suominen Group.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

KEY RATIOS

* Compared with the corresponding period in the previous year.

CALCULATION OF KEY RATIOS AND ALTERNATIVE PERFORMANCE MEASURES

Key ratios per share are either IFRS key ratios (earnings per share) or required by Ordinance of the Ministry of Finance in Finland or alternative performance measures (cash flow from operations per share).

Some of the other key ratios Suominen publishes are alternative performance measures. An alternative performance measure is a key ratio which has not been defined in IFRS Accounting Standards. Suominen believes that the use of alternative performance measures provides useful information for example to investors regarding the Group's financial and operating performance and makes it easier to make comparisons between the reporting periods.

The link between the components of the key ratios per share and the consolidated financial statements is presented in the consolidated financial statements of 2024. The link between the components of the alternative performance measures and the consolidated financial statements is presented in Suominen’s Annual Report for 2024.

Calculation of key ratios per share

Earnings per share

Cash flow from operations per share

Equity per share

Market capitalization

Share turnover

Calculation of key ratios and alternative performance measures

Operating profit and comparable operating profit

In order to improve the comparability of result between reporting periods. Suominen presents comparable operating profit as an alternative performance measure. Operating profit is adjusted with material items that are considered to affect comparability between reporting periods. These items include, among others, impairment losses or reversals of impairment losses, gains or losses from the sales of property, plant and equipment or intangible assets or other assets and restructuring costs.

Comparable EBIT

EBITDA and comparable EBITDA

EBITDA is an important measure that focuses on the operating performance excluding the effect of depreciation and amortization, financial items and income taxes, in other words what is the margin on net sales after deducting operating expenses.

EBITDA = EBIT + depreciation, amortization and impairment losses

Comparable EBITDA = EBIT + depreciation, amortization and impairment losses, adjusted with items affecting comparability

Gross capital expenditure

Interest-bearing net debt

It is the opinion of Suominen that presenting interest-bearing liabilities not only at amortized cost but also at nominal value gives relevant additional information to the investors.

Return on equity (ROE), %

Invested capital

Return on invested capital (ROI), %

Equity ratio, %

Gearing, %

NET SALES BY GEOGRAPHICAL MARKET AREA

QUARTERLY SALES BY BUSINESS AREA

QUARTERLY DEVELOPMENT

RELATED PARTY INFORMATION

Suominen Group's related parties include the parent of the Group (Suominen Corporation) and subsidiaries. In addition, the related parties of Suominen include the members of the Board of Directors, President & CEO and the members of the Executive Team as well as their family members and their controlled companies. In addition, shareholders who have a significant influence in Suominen through share ownership are included in related parties. Suominen has no associated companies or joint ventures.

In its transactions with related parties Suominen follows the same commercial terms as in transactions with third parties.

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

Goodwill is not included in intangible assets.

CHANGES IN INTEREST-BEARING LIABILITIES

FINANCIAL ASSETS BY CATEGORY

a. Financial assets at amortized cost
b. Financial assets at fair value through other comprehensive income
c. Carrying amount
d. Fair value

Principles in estimating fair value of financial assets for 2025 are the same as those used for preparing the consolidated financial statements for 2024.

FINANCIAL LIABILITIES

Principles in estimating fair value for financial liabilities for 2025 are the same as those used for preparing the consolidated financial statements for 2024.

FAIR VALUE MEASUREMENT HIERARCHY

Principles in estimating fair value of financial assets and their hierarchies for 2025 are the same as those used for preparing the consolidated financial statements for 2024. There were no transfers in the fair value measurement hierarchy levels during the reporting period.

SUOMINEN CORPORATION
Board of Directors

For additional information, please contact:
Tommi Björnman, President & CEO, tel. +358 10 214 3018
Janne Silonsaari, CFO, tel. +358 50 409 9264

Suominen manufactures nonwovens as roll goods for wipes and other applications. Our vision is to be the frontrunner for nonwovens innovation and sustainability. The end products made of Suominen’s nonwovens are present in people’s daily life worldwide. Suominen’s net sales in 2024 were EUR 462.3 million and we have over 700 professionals working in Europe and in the Americas. Suominen’s shares are listed on Nasdaq Helsinki. Read more at www.suominen.fi.

Distribution:
Nasdaq Helsinki
Main media
www.suominen.fi

Attachment

• Suominen Corporation Interim report Q1 2025