SUOMINEN CORPORATION INTERIM REPORT JANUARY 1 MARCH 31, 2004

Transcription

1 1(5) SUOMINEN CORPORATION INTERIM REPORT JANUARY 1 MARCH 31, 2004 SUOMINEN'S FINANCIAL RESULTS FOR THE FIRST QUARTER DECLINED ON THE PREVIOUS YEAR Net sales: EUR 62.1 million (EUR 41.7 million January 1 - March 31, 2003) Operating profit: EUR 3.1 million (3.8) Earnings/share: EUR 0.06 (0.12) Cash flow from operations/share: EUR 0.13 (0.08) Return on invested capital (ROI): 7.8 % (14.0) Prospects for the rest of the year: The results for the full year are estimated to be on the level of FINANCIAL RESULTS Suominen Corporation recorded first-quarter net sales of EUR 62.1 million, representing an increase of 49 per cent on the previous year. The increase was due to the company acquisition in the Wet Wipes business area. Without the acquisition, there would have been a decrease in net sales of 5 per cent. The profit before taxes during the first quarter was EUR 2.0 million (3.3). The Wet Wipes business area recorded an operating profit of EUR 0.5 million, Nonwovens an operating profit of EUR 1.5 million (2.5) and Flexible Packaging an operating profit of EUR 0.9 million (1.1). The operating profit for Other Business Operations was EUR 0.2 million (0.2). The goodwill arising from the acquisition of the Wet Wipes business area was reduced by EUR 2.8 million after reassessment of the final acquisition price. Net sales of Suominen Wet Wipes during the first quarter were EUR 23.1 million or 8 per cent less than in the same period of the previous year. The volumes of baby wipes rose, the volumes of personal care wipes remained on the level of the previous year, and the volumes of household cleaning wipes declined considerably as a result of product transfers. Prices for end products and for the raw materials used in them declined on the previous year. Due to the low volumes of household cleaning wipes, capacity utilisation and profitability decreased. Costs were adjusted to the lower level of capacity utilisation and modernisation of production facilities continued. The financial results and profitability of Nonwovens declined from the good first quarter of the previous year due to a drop in sales prices. Net sales decreased by 5 per cent and amounted to EUR 19.9 million. Sales volumes of hydroentangled wiping products increased on the previous year in both Europe and the USA and sales of hygiene and health care product materials rose substantially. Rationalisation of production has increased efficiency and improved the cost position of operations. Net sales of Flexible Packaging amounted to EUR 16.6 million and were 4 per cent below the figure for the previous year. The decrease was due to lower sales prices and fluctuations in exchange rates. Profit declined as sales prices decreased more than raw material prices. The volume of sales was on the level of the previous year. The volumes of food and retail packaging rose and those of hygiene product and special packaging decreased. Volumes continued to increase in Poland. In Russia, sales were down on the corresponding period of In Other Business Operations, Webbing Products sustained an operating loss of EUR 0.2 million mainly because of the expenses involved in reorganisation. Operations are being continued under the name Inka and a decision was made to centralise production at Virrat, Finland and in Estonia. FINANCING Interest-bearing liabilities totalled EUR 81.5 million or EUR 5.1 million more than at the beginning of the year. The company has EUR 10 million in capital loans. Net financial costs were EUR 1.0 million (EUR 0.5 million). They were 1.6 per cent (1.3 %) of net sales and 33.3 per cent (14.4 %) of operating profit. EUR 1.9 million in working capital were tied up in the cash flow statement. When the company's capital loans are included in shareholders' equity, the equity ratio was 37.5 per cent (40.9 %) and the ratio of interest-bearing net liabilities to shareholders equity (the gearing rate) was per cent (96.1 %). Including the capital loans in liabilities, the corresponding figures were 32.4 per cent and per cent. Cash flow per share from operations was EUR 0.13 (0.08). INVESTMENTS The Company s gross investments in production totalled EUR 3.9 million (EUR 1.0 million). Planned depreciation was EUR 4.6 million (3.6). Of the total investments Wet Wipes represented EUR 0.3 million, Nonwovens EUR 0.4 million and Flexible Packaging EUR 3.0 million. The most important investment project was the expansion of the Flexible Packaging plant in Poland. ANNUAL GENERAL MEETING OF SHAREHOLDERS The Annual General Meeting of Shareholders was held on March 15, The Annual General Meeting decided to pay a dividend of EUR 0.30 per share for 2003, totalling EUR 7,107, The Annual General Meeting approved the financial statements for 2003 and released the members of the Board of Directors and the President and CEO from liability for the financial period. Members of the Board of Directors Kari Haavisto, Pekka Laaksonen and Heikki Mairinoja were re-elected for the years The Board of Directors comprises the following persons: Matti Kavetvuo, Kari Haavisto, Pekka Laaksonen, Heikki Mairinoja and Heikki Bergholm.

2 2(5) PricewaterhouseCoopers Oy, Authorised Public Accountants, with Heikki Lassila, APA, as the principal auditor, were elected as auditors. The Annual General Meeting authorised the Board of Directors to decide on the acquisition of the Company's own shares within one year from the Annual General Meeting of Shareholders using assets available for distribution of profits, provided that the par value of the shares of the Company and it's subsidiaries thus acquired, combined with the par value of own shares acquired previously by the Company and its subsidiaries, does not exceed 5 per cent of the Company s total share capital at the moment of acquisition. The Annual General Meeting also authorised the Board of Directors to decide on the conveyance of the Company s own shares. According to the authority granted to the Board of Directors in 2003, the Company conveyed 8,999 of its own shares between January 1 and March 31, The average price of the conveyed shares was EUR On March 31, 2004 Suominen Corporation held a total of 29,294 of its own shares, accounting for 0.1 per cent of the share capital and votes. The Board of Directors did not exercise its authority to buy the Company's own shares during the period under review. OTHER AUTHORISATION FOR THE BOARD OF DIRECTORS The Board of Directors is not currently authorised to issue shares or to launch a convertible bond or a bond with warrants. COMPANY SHARES The volume of Suominen Corporation's shares traded on Helsinki Exchanges from January through March was 2,545,709 shares or 10.7 per cent of the total. The trading price of the shares varied between EUR 5.20 and The final trading price was EUR The market capitalisation was EUR million on March 31, OWN SHARES OF THE COMPANY On January 1, 2004 the Company held 38,293 of its own shares, with an acquisition value of 5.22 euros per share. PROSPECTS FOR THE REST OF THE YEAR On the basis of contracts made, customer-need forecasts, and orders in hand, net sales in 2004 are expected to increase by approximately 50 per cent, primarily as a result of the acquisition in the Wet Wipes business area. The volumes of all business areas are expected to grow, and net sales will probably remain on the level of the previous year or grow. Net sales in Other Business Operations are likely to decline. The overall price level will be lower than in 2003, and will not be offset entirely by reduced costs. Both operating profit and profit for the financial year are expected to be on the same level as in SUOMINEN CORPORATION CONSOLIDATED JANUARY 1 - MARCH 31, 2004 STATEMENT OF INCOME EUR /2004 % 1-3/2003 % Change % 1-12/2003 % Net sales Cost of goods sold Gross profit Sales and marketing expenses Administration expenses Other operating income and expenses Depreciation on goodwill Operating profit Financial income and expenses Profit before income taxes Income taxes * Profit for the period * Taxes on the profit for the review period.

3 3(5) BALANCE SHEET EUR /2004 3/ /2003 Assets Fixed assets Intangible assets Tangible assets Financial assets Fixed assets, total Current assets Inventories Current receivables Cash at bank and in hand Current assets, total Assets, total Shareholders' equity and liabilities Shareholders equity Share capital Own shares Other restricted equity Equity in untaxed reserves Other unrestricted equity Capital loans Shareholders equity, total Provisions Liabilities Deferred tax liability Non-current liabilities Current liabilities Liabilities, total Shareholders' equity and liabilities, total KEY FIGURES 3/2004 3/ /2003 Earnings/share, EUR Equity/share, EUR Cash flow from operations/share, EUR Return on equity, % (ROE) Return on invested capital, % (ROI) Equity ratio, % Equity ratio, %, capital loans in equity Gearing, % Gearing, %, capital loans in equity Gross investments, EUR Depreciation, EUR CASH FLOW STATEMENT EUR / / /2003 Cash flow before change in working capital Change in working capital Financial items and taxes Cash flow from operations Investments Proceeds from sale of fixed assets Cash flow from investing activities Proceeds from issuance of share capital Proceeds from capital loans Dividends paid Change in interest-bearing liabilities Effect of exchange rate changes Change in cash and cash equivalents

4 4(5) FIGURES BY BUSINESS AREA NET SALES EUR / /2003 Change % 1-12/2003 Wet Wipes Nonwovens Flexible Packaging Others* Total OPERATING PROFIT EUR /2004 % 1-3/2003 % 1-12/2003 % Wet Wipes Nonwovens Flexible Packaging Others* Total * Include Other Business Operations and consolidation items. QUARTERLY FIGURES EUR II/2003 III/2003 IV/2003 I/2004 II/2003- I/2004 Net sales Wet Wipes Nonwovens Flexible Packaging Others* Net sales, total Operating profit Wet Wipes % of net sales Nonwovens % of net sales Flexible Packaging % of net sales Others* % of net sales Operating profit, total % of net sales Net financial expenses Profit before extraordinary items *Include Other Business Operations and consolidation items. AVERAGE PERSONNEL months months months Wet Wipes* Nonwovens Flexible Packaging Webbing Products Product and Process Development Group Management and Administration Total * At the end of 2003 the personnel of the business area were 337.

5 5(5) CONTINGENT LIABILITIES EUR / /2003 For own debts Real estate mortgages Business mortgages Other own commitments Leasing payments and commitments Rent commitments DERIVATIVE CONTRACTS EUR / /2003 Currency derivatives Nominal value Current value Interest rate derivatives Nominal value Current value Electricity derivatives Nominal value Current value The figures have not been audited. Helsinki, 20 April 2004 SUOMINEN CORPORATION Board of Directors Additional information: Mr. Heikki Begholm, President and CEO, tel Suominen Corporation Telephone Business ID Hämeenkatu 7 B Fax Domicile Tampere P.O. Box FIN Tampere firstname.lastname@suominen.fi Finland