Suominen's investor presentation, Oslo, 1 September 2015

Suominen Corporation: Profitable growth through product leadership 1 September 2015 Nina Kopola, President & CEO Tapio Engström, CFO

Contents

• Suominen in a nutshell • Markets • Financials Q2/2015 • Strategy 2015–2017 and the growth investment program

9/1/2015 Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications. 2

Suominen in a nutshell

Key facts

8 plants in 3 continents 600 employees

Net sales 401.8 M€ in 2014

Over 60 % of sales from Americas

2 business

areas

100% nonwovens


Suominen manufactures nonwovens as roll goods


Our nonwovens are converted into consumer as well as professional applications


We executed a fast transformation into a nonwovens company with operations in three continents

2011

Three lines of business: Nonwovens Flexibles Codi Wipes

11/1/2011 Ahlstrom Home&Personal acquisition

7/15/2013 Divestment of Codi Wipes

2/10/2014 Acquisition of Brazilian unit

7/14/2014 Divestment of Flexibles business area

Net sales by line of business and geographical coverage from 2011 to date.


• Main end use areas:

- Hygiene products (femcare, incontinence, diapers)

- Medical nonwovens (e.g. swabs, undercast pads, surgical drapes and masks)

• Net sales of the business area (2014) 32.3 M€

• Main end use areas:

- Wiping (baby, household, personal care , industrial wipes

- Travel & catering applications

• Suominen is the global leader in nonwovens for wiping applications

• Net sales of the business area

(2014): 369.4 M€

Convenience business area

Today, Suominen is a 100% nonwovens company with two business areas

Care business area

Eight nonwovens plants in three continents serving both business areas

~90% of Suominen’s net sales ~10% of Suominen’s net sales


Locations in three continents close to customers

Green Bay, WI, USA

Windsor Locks, CT, US

Bethune, SC, US

Paulínia, Brazil

Alicante, Spain

Mozzate, Italy

Nakkila, Finland

Cressa, Italy

Ställdalen, Sweden

Port-Audemer, France

Brignoud, France

Trading plants (not owned by Suominen)

Helsinki, Finland (Head office)

Sales representatives present in several locations in Asia Pacific


Markets

Historically, growth in demand for nonwovens has exceeded the growth of the GDP

USA Europe

-4%

-2%

0%

2%

4%

6%

8%

10%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

GDP Nonwoven demand

2014–2016 GDPs are forecasted. In Europe, GDP growth is for euro area. For nonwovens demand, the graphs illustrate the change in the value (USD) of nonwoven demand; 2006-2010 actual, 2011-2015 forecasted.

-10%

-5%

0%

5%

10%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

GDP Nonwoven demand

11 Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications. 9/1/2015

Demand for Suominen nonwovens is expected to grow globally

+2%

+7%

+2–6%

+7% +8%

Global growth rate ~5% Growth rate for Suominen regions ~3%

Aging population Everyday convenience Health and well-being trends

Growing population and middle class

Growing population and middle class

12 Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications. 9/1/2015

Household wipes

Incontinence products

Baby wipes

Disposable diapers

Feminine care products

Demand for Suominen’s products is growing both in emerging and developed markets

USD 14 000+

USD 7 000+

USD 10 000+

USD 4 000+

GDP per capita

USD 1 000+


We are the global leader in nonwovens for wipes

Suominen 18%

Kimberly-Clark 11%

Jacob Holm 9%

Sandler 8% Avintiv

(ex-PGI) 5%

Other 49%

Suominen #1 Wiping ~2.1 billion euros

Global nonwovens market totaling ~26 billion euros

Other key producers • Kimberly-Clark • Avintiv (ex-PGI) • Fiberweb • First Quality Nonwovens • Pegas Nonwovens

Other key producers • Kimberly-Clark • Ahlstrom • Freudenberg • DuPont • First Quality Nonwovens

Upholstery 10%

Other 27%

Building/roofing 7%

Filtration 9%

Floor coverings 6%

Automotive 5%

Wiping 8%

Medical 3%

Hygiene 25%


Financials Q2/2015

Q2: Net sales increased by 19%

Net sales, M€

Net sales, M€


93.1 93.5 89.8

98.4 95.3 103.3 104.8

111.9 112.9

0

20

40

60

80

100

120

55.7 98.3

356.9 373.7 401.8

050

100150200250300350400450

2010 2011 2012 2013 2014

- Net sales grew by 19% in Q2. The strengthening of the USD and improved demand in the European market (compared to Q2 2014) had a positive impact on net sales.

Continuing operations. Continuing operations.

H1: No significant changes in the portfolio

H1/2014: 193.7 M€

H1/2015: 224.9 M€


40%

17%

12%

22%

8% 1%

40%

16% 11%

23%

8% 2%

Baby wipes Household wipes Industrial wipes Personal care wipes Hygiene and medical products Others

Convenience 92%, Care 8% Convenience 92%, Care 8%

Typically higher value-add products

Q2: Operating profit improved to record-high level

Operating profit excl. NRI, M€ and %

Operating profit excl. NRI, M€ and %


- Growth in net sales and further strengthened gross profit improved operating profit. - Strengthening of the USD compared to euro increased the operating profit by

nearly 14%.

5.0 % 6.2 %

5,0 %

6.5 % 5.8 %

8.4 %

5.9 % 6.5 %

8.8 %

0%

2%

4%

6%

8%

10%

0

2

4

6

8

10

12

M€ %

-6.5 % -4.4 %

4.2 %

5.2 %

6.7 %

-8%-6%-4%-2%0%2%4%6%8%

-10-505

1015202530

2010 2011 2012 2013 2014

M€ %Continuing operations. Continuing operations.

Statement of profit or loss

Healthy cost structure

Net sales grew

Effective tax rate on Q2: 33.5%; on H1: 35.4%

EUR thousand Q2 2015 Q2 2014 FY 2014 Net sales 112,944 95,340 401,762

Cost of goods sold -97,160 -84,399 -352,091 Gross profit 15,784 10,941 49,671 Other operating income 903 539 2,655

Sales and marketing expenses -1,756 -1,712 -6,278 Research and development -736 -784 -2,877 Administration expenses -4,179 -3,440 -14,144 Other operating expenses -83 -20 -2,177 Operating profit excluding non-recurring items 9,932 5,524 26,851 Non-recurring items 530 -278 -954 Operating profit 10,462 5,246 25,897 Net financial expenses -1,076 -1,276 -8,075

Profit before income taxes 9,386 3,970 17,822 Income taxes -3,142 -1,786 -7,645

Profit for the period from continuing operations 6,244 2,184 10,177

Positive gross profit development


Statement of financial position, assets

EUR thousand 30 June 2015 30 June 2014 31 Dec 2014 Non-current assets Goodwill 15,496 15,496 15,496 Intangible assets 12,601 12,508 12,510 Property, plant and equipment 88,297 87,467 88,721 Loan receivables 8,202 − 8,202 Available-for-sale assets 806 922 1,124 Held-to-maturity investments 465 455 450 Other non-current receivables 2,389 − 2,614 Deferred tax assets 5,189 5,634 5,516 Total non-current assets 133,445 122,482 134,633

Current assets Inventories 32,322 28,878 32,380 Trade receivables 60,193 48,657 52,269 Loan receivables 350 59 600 Other current receivables 4,222 6,480 4,618 Assets for current tax 1,601 695 1,682 Cash and cash equivalents 42,778 17,331 38,430 Total current assets 141,465 102,100 129,979

Assets held for sale − 32,243 −

Total assets 274,910 256,825 264,611

Cash at elevated level


Statement of financial position, equity and liabilities

Decrease in the nominal value of the hybrid bond due to the conversions made

EUR thousand 30 Jun 2015 30 Jun 2014 31 Dec 2014 Share capital 11,860 11,860 11,860 Share premium account 24,681 24,681 24,681 Reserve for invested unrestricted equity 69,652 97,192 97,192 Treasury shares -44 -44 -44 Fair value and other reserves 107 -884 96 Exchange differences 6,011 -821 3,419 Other equity -9,824 -50,410 -46,890 Total equity attributable to owners of the parent 102,444 81,574 90,313

Hybrid bond 16,884 17,899 18,424 Total equity 119,328 99,473 108,737 Liabilities Non-current liabilities Deferred tax liabilities 9,886 6,841 8,789 Other non-current liabilities 1,610 1,872 1,729 Debentures 75,000 − 75,000 Other non-current interest-bearing liabilities 6,667 62,104 6,667

Total non-current liabilities 93,163 70,817 92,185 Current liabilities Current interest-bearing liabilities 3,333 22,940 3,347 Liabilities for current tax 1,519 376 246 Trade payables and other current liabilities 57,567 49,666 60,096

Total current liabilities 62,420 72,982 63,689 Total liabilities 155,583 143,799 155,874 Liabilities related to assets held for sale − 13,553 − Total equity and liabilities 274,910 256,825 264,611


Cash flow weakened from the comparison period, cumulatively close to comparison period level

Cash flow from operations, M€ Cash flow from operations, M€


2.9 4.3

16.3

-0.4

11.3

16.9

9.3

4.5 3.9

-202468

1012141618

-2.5 -2.9

24.9 21.3

37.1

-505

10152025303540

2010 2011 2012 2013 2014

Statement of cash flows (1/2)

The financial items were impacted by currency forward contracts hedging equity and the interests of the debenture bond paid

9/1/2015 Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications.

EUR thousand H1 2015 H1 2014 FY 2014

Cash flow from operations Profit / loss for the period 9,726 1,062 4,973 Total adjustments to profit / loss for the period 16,378 20,485 39,953 Cash flow before changes in net working capital 26,105 21,547 44,927 Change in net working capital -9,263 -4,845 6,140 Financial items -4,966 -2,792 -6,514 Income taxes -3,468 -3,065 -7,434 Cash flow from operations 8,407 10,845 37,119

Cash flow from investments Investments in property, plant and equipment and intangible assets -4,009 -4,016 -7,740

Investments in acquired businesses − -19,261 -19,261 Cash flow from disposed businesses − − 4,736 Sales proceeds from property, plant and equipment and intangible assets 10 31 59

Cash flow from investments -4,000 -23,246 -22,206

Cash flow in 2014 includes also discontinued operations.

Net working capital slightly elevated

23

Statement of cash flows (2/2)

9/1/2015 Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications.

EUR thousand H1 2015 H1 2014 FY 2014 Cash flow from financing Drawdown of hybrid bond − 17,500 17,500 Drawdown of debenture bond − − 75,000 Drawdown of other non-current interest-bearing liabilities − − 10,000

Repayment of other non-current interest-bearing liabilities − -4,304 -78,220

Changes in current interest-bearing liabilities -14 -632 -18,324

Changes in loan receivables 417 − − Share issue 340 − − Distribution of funds -2,504 − − Cash flow from financing -1,761 12,564 5,956

Change in cash and cash equivalents 2,647 163 20,869

Cash and cash equivalents at the beginning of the period 38,430 18,585 18,585

Effect of changes in exchange rates 1,701 -103 -1,025 Change in cash and cash equivalents 2,647 163 20,869 Cash and cash equivalents at the end of the period 42,778 18,646 38,430

Assets held for sale, cash and cash equivalents − -1,315 −

Cash and cash equivalents at the end of the period, continuing operations 42,778 17,331 38,430

Cash flow in 2014 includes also discontinued operations.

Earn-out payment and repayments of loan receivables related to the divestment of Flexibles

24

Outlook for 2015 (July 17 2015)

Suominen repeats its estimate, announced on 27 April 2015, according to which Suominen expects that for the full year 2015, its net sales and operating profit excluding non-recurring items from continuing operations will improve from year 2014. Suominen’s net sales of the continuing operations in 2014 amounted to EUR 401.8 million and operating profit excluding non-recurring items was EUR 26.9 million.


Strategy 2015–2017

In this strategy period, we continue with the three cornerstones but focus on being In the Lead

How we operate

In the Lead

Step Change in Profitability

Suominen Way

How we work How we win

Understanding the end user remains in the heart of our strategy

Fiber producer

Nonwovens manufacturer

Brand owner

Converter, e.g. wet wipe manufacturer

Retailer

Primary production


In 2015–2017, we target growth, market-driven way of operating, and product leadership

Organic growth exceeding industry average

Market-driven way of

operating

Product leadership


We aim at achieving a major shift in product portfolio

41%

15%

12%

22%

8% 2%

2014 (401.8 M€)

Baby Household

Industrial Personal care

Medical and hygiene Other

2017 (approx. 500 M€)

Illustrative.


To implement the strategy, we have a focused ~60 M€ growth investment program

Extend geo-graphical

reach Acquisitions Sustain &

improve Retrofit Expand

Projected growth investments appr. 60 M€ until 2017

Not in focus in the strategy period 2015–2017

Some 1-2% of net sales


The growth investment program was launched swiftly and is proceeding as planned


Bethune, SC, US

Paulínia, Brazil

Alicante, Spain

Nakkila, Finland

Growth investment projects in Brazil, Finland and Spain

• Investments in equipment at the Paulínia plant in Brazil and the Alicante plant in Spain will broaden our product offering. - In future, the plants will be able to supply nonwovens not only to higher

added-value wiping products, but also to medical nonwovens. • At the Nakkila plant in Finland, we took into use one

previously closed production line during Q2. The plant is now able to flexibly meet the strengthened demand on the European markets.


Growth investment project in the USA

• We will invest in a new wetlaid production line at our plant in Bethune, SC, USA.

• The total value of the investment, including both equipment and facilities, will be close to EUR 50 million.

• The new line - is tailor-made for us based on our technological expertise - will focus on higher value-added nonwovens, which are used for

household and industrial wiping and flushable wiping products, to name examples

- will support our strategic target of increasing the share of products with higher value-added in our portfolio.

• The installation is expected to be finished in H2/2016.


Mid-term financial targets

• Increase net sales organically at a rate that exceeds the average growth rate of the industry. (In 2014, Suominen’s net sales grew organically 3.5%, slightly faster than the industry average.)

• Have a solid capital structure with a gearing ratio principally between 40% and 80%. (Q2/2015: 28.2%).

• Clearly improve relative profitability. The target level of the company’s return on investment (ROI) is above 12%. (Q2/2015, rolling 12 months: 17.1%).


Suominen’s strategy 2015–2017

• Deliver superior value in thoughtfully selected market applications.

• Drive proactive key account management for mutual value creation.

• Execute demand driven supply chain.

• Evolve culture and capabilities to build strong product company.

Market Driven Product Leader

Our purpose is to make nonwovens continuously better for people.

• Organic net sales growth at a rate that exceeds the industry average (approx. 3%)

• A return on investment of more than 12% • A gearing ratio between 40% and 80%

Purpose – why?

Vision – where?

Strategy – how?

Financial targets


Summary: Suominen as an investment

Strong track record

Successful transformation, now full focus on nonwovens

Focused strategy for 2015 – 2017 & ambitious growth scenario

Financial position enables the execution

Dividend policy defined for the creation of shareholder value

100%

500 M€

60 M€

30%


Thank you!

Appendices


30%

23% 23%

21%

3% ViscosePulpPolypropene*PolyesterOther

*Including sourced PP Spunbond.

Raw material purchases in 2014


• Total raw material purchases were 138,000 tons in 2014.

Share information

Largest shareholders (26/8/15) Nr of shares %

AC Invest Two B.V. 67,724,176 26.83 Varma Mutual Pension Insurance Company 22,500,000 8.91 Ilmarinen Mutual Pension Insurance Company 18,422,103 7.30

Elo Pension Company 14,123,255 5.60

Euroclear Bank Sa/Nv 12,342,418 4.89

Oy Etra Invest Ab 12,223,320 4.84

Nordea Nordic Small Cap Fund 7,660,763 3.03

Skandinaviska Enskilda Banken AB 7,049,592 2.79

Nordea Bank Finland Plc 5,988,846 2.37

OP-Delta Fund 5,500,000 2.18


Basic share information • Trading code SUY1V • ISIN code FI0009010862 • List: NASDAQ Helsinki,

Consumer Goods (small cap) • Number of shares 252,425,616 • Share capital 11,860,056 EUR • Market cap ~270 MEUR

(end Aug 2015)

* A group company of Ahlström Capital, a private equity company

Our history stems from 1767

Orlandi 1933

Green Bay Nonwovens

1997

Tecnofibra/ Fiberweb

1971

C.H. Dexter & Sons 1767

J.W. Suominen

1898

Part of Suominen since 2001

Ahlstrom Brazil 2008

Part of Ahlstrom

since 2007

Part of Ahlstrom

since 2007

Part of Ahlstrom

since 2004

Part of Ahlstrom

since 2000

Part of Lassila

& Tikanoja since 1982


Suominen 2015


Nakkila Windsor Locks Mozzate, Alicante, Bethune Cressa Green Bay Paulínia


Sustainability agenda 2015–2017

Long-term relations

with customers & suppliers

Our purpose is to make nonwovens continuously better for people.

Innovation

Development of

sustainable products

Competence development

Non-discrimination

Material & resource

efficiency

Achieving product leadership

Fostering responsibility throughout the value chain

Operating sustainably throughout the organization


Refinancing: issuance of a 75 MEUR bond in Sep 2014

• Senior unsecured bond with maturity of five years. • Fixed coupon with an interest rate of 4.375 per cent per annum. • Issue was oversubscribed by more than 40 investors. • Listed on NASDAQ OMX Helsinki. • Listing prospectus is available at www.suominen.fi > Investors >

Financials > Debt information.

Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications. 44 9/1/2015

Refinancing: renewed credit facilities

• In connection with issuing the bond, Suominen entered into a syndicated credit facilities agreement totaling EUR 55 million.

• The syndicated credit facilities consist of: • a multicurrency revolving credit facility of EUR 30 million with a

maturity four years • a term loan of EUR 10 million with a maturity of three years • a term loan of EUR 15 million with a maturity of four years.

• The lenders for the facilities are Nordea Bank Finland Plc and Pohjola Bank Plc.

• The bank facilities include leverage ratio and gearing as financial covenants.

Suominen is a globally leading supplier of nonwovens for wiping, hygiene and medical applications. 45 9/1/2015

Investor Relations

Suominen's investor presentation, Oslo, 1 September 2015