SuominenInterim Report January-September 2019

October 22, 2019Petri Helsky, President and CEOToni Tamminen, CFO

Our purpose is to make life better.

Agenda

• Q3/2019 in brief• Financial review Q3/2019• Innovative Suominen• Outlook for 2019 • Q&A

October 22, 2019 2

Our purpose is to make life better.

Q3 in brief

• Operating profit improved to EUR 1.1 million (0.5)• Net sales remained on the same level as in the comparison period and amounted to

EUR 103.4 million (104.8)• Cash flow from operations strengthened to EUR 17.4 million (7.7)

• In Bethune our systematic improvement plan has resulted in a clear improvement in operational performance

• Investment project in Green Bay has proceeded smoothly and is nearing completion• New business areas are Europe and Americas

October 22, 2019 3

Our purpose is to make life better.

- Sales volumes decreased slightly and sales prices were on the same level as in the comparison period- In Q3 the strengthening of the USD compared to EUR increased the net sales by EUR 2.7 million

October 22, 2019 4

Net sales were on the same level as in the comparison period

Net sales, EUR million Net sales, EUR million

102,4 98,7106,6 110,0

104,8109,8 109,8 103,8 103,4

0

20

40

60

80

100

120

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

401,8444,0

416,9 426,0 431,1

317,0

050

100150200250300350400450500

2014 2015 2016 2017 2018 Q1-Q3/2019

Continuing operations in 2014.

Our purpose is to make life better.

- Operating profit improved mainly due to improvements in gross profit from raw material prices and raw material efficiency- The negative impact of foreign exchange rates was approx. EUR 0.6 million

October 22, 2019 5

4,6

-0,31,5

2,9

0,5 -0,4

3,0 2,7

1,1

-1%

0%

1%

2%

3%

4%

5%

-2

0

2

4

6

8

10

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

EUR million %

Operating profit improved

Operating profit Comparable operating profit

26,931,2

25,6

15,0

4,6 6,70%1%2%3%4%5%6%7%8%

0

5

10

15

20

25

30

35

2014 2015 2016 2017 2018 Q1-Q3/2019

EUR million %

Continuing operations in 2014

Our purpose is to make life better.

Financial review Q3/2019

October 22, 2019 6

Our purpose is to make life better.

Profit for the period

Profit for the period, EUR million Profit for the period, EUR million

1,8

6,3

-0,4

1,8

-1,1-2,0

1,10,4

-0,1

-3-2-101234567

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

10,2

17,015,2 14,5

-1,71,4

-5

0

5

10

15

20

2014 2015 2016 2017 2018 Q1-Q3/2019

Continuing operations in 2014.

October 22, 2019 7

Our purpose is to make life better.

Consolidated statement of profit or loss

October 22, 2019 8

EUR thousand 7-9/ 20197-9/

20181-9/

20191-9/

20181-12/2018

Net sales 103,363 104,768 316,953 321,344 431,109

Cost of goods sold -95,677 -98,178 -290,597 -296,852 -399,826

Gross profit 7,687 6,589 26,356 24,493 31,283

Other operating income 694 936 2,297 2,131 2,528

Sales and marketing expenses -1,885 -1,599 -5,673 -5,210 -7,048

Research and development -860 -883 -2,582 -2,692 -3,515

Administration expenses -4,397 -4,207 -13,040 -13,228 -17,599

Other operating expenses -130 -348 -633 -539 -1,055

Operating profit 1,108 488 6,724 4,955 4,594

Net financial expenses -1,080 -1,626 -4,072 -4,010 -5,557

Profit before income taxes 28 -1,138 2,652 945 -963

Income taxes -108 -7 -1,232 -649 -757

Profit / loss for the period -80 -1,145 1,420 296 -1,720

Earnings per share, EUR

Basic 0.00 -0.02 0.02 0.01 -0.03

Diluted 0.00 -0.02 0.02 0.01 -0.03

Our purpose is to make life better.

Cash flow from operations

Cash flow from operations, EUR million Cash flow from operations, EUR million

2,33,6 5,2

10,8

7,7 8,5

-2,4

9,1

17,4

-5

0

5

10

15

20

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19

37,1

27,3 28,5

22,2

32,1

24,2

0

5

10

15

20

25

30

35

40

2014 2015 2016 2017 2018 Q1-Q3/2019

October 22, 2019 9

- We succeeded in reducing inventories significantly during the quarter, which improved our cash flow

Our purpose is to make life better.

Statement of cash flows

October 22, 2019 10

EUR thousand 1-9/2019 1-9/2018 1-12/2018

Cash flow from operationsProfit for the period 1,420 296 -1,720Total adjustments to profit for the period 25,861 20,014 27,210Cash flow before changes in net working capital 27,281 20,310 25,490Change in net working capital 611 -614 5,621Financial items -2,613 -2,241 -4,677Income taxes -1,120 6,228 5,715Cash flow from operations 24,160 23,682 32,148

Cash flow from investments -9,410 -10,906 -14,837

Cash flow from financingDrawdown of current interest-bearing liabilities 19,000 − 5,000Repayment of current interest-bearing liabilities -27,876 -15,088 -15,118Return of capital − -6,322 -6,322Cash flow from financing -8,876 -21,410 -16,440

Cash and cash equivalents at the beginning of the period 27,757 27,240 27,240

Effect of changes in exchange rates 1,086 -967 -355

Change in cash and cash equivalents 5,874 -8,634 871

Cash and cash equivalents at the end of the period 34,717 17,639 27,757

Our purpose is to make life better.

Innovative Suominen

October 22, 2019 11

Our purpose is to make life better.

We create nonwovens that others cannot

• R&D is based on customer needs• Extensive R&D network

- 20 R&D professionals- Cooperation with research centers and start-ups

• R&D focus areas are- Sustainability- Customization

October 22, 2019 12

Suominen Intelligent Nonwovens™

Suominen Intelligent Nonwovens™ innovative Artificial Intelligence (AI) system that:

Utilizes our unique, machine readable High-

definition Design technology

Adds traceability and safety to products

Operates with any smart phone

Provides a new marketing & service platform

Limitless possibilitiesSuominen Intelligent Nonwovens™

PRODUCT SAFETY AND TRACEABILITY• Traceability• Product information• Product instructions

INTERACTION• Customer service• Customer feedback• Surveys• Chat

BRANDING• Loyalty programs• Re-order possibilities

COMMITMENT• Marketing campaigns• Games

Our purpose is to make life better.

Outlook 2019

October 22, 2019 15

Our purpose is to make life better.

Outlook for 2019

October 22, 2019 16

• Suominen expects that in 2019, its net sales will be at the level of 2018 and comparable operating profit, excluding the positive effect of applying IFRS 16 Leases, will improve from 2018.

• In 2018, Suominen’s net sales amounted to EUR 431.1 million and operating profit to EUR 4.6 million.

Our purpose is to make life better.

Q&A

October 22, 2019 17

@SuominenOyjSuominen Corporation

@SuominenCorp

October 22, 2019 18