“Suominen’s operating profit improved 14% on the comparison period and stood at EUR 7.3 million. The net sales growth as well as the strengthening of the US dollar both had an impact on the operating profit,” commented Nina Kopola, President and CEO.

“I am particularly pleased with Suominen’s strong cash flow. Our January–March cash flow from operations, which in recent years has been negative, was EUR 4.5 million (-0.4) this year.”

New production line

Suominen announced its plans to execute an investment in a new production line in North America. If the planning process proceeds as expected, the location of the manufacturing line would be Suominen’s plant in Bethune, South Carolina, USA.

“Realization of the project would support not just the growth target set for the 2015–2017 strategy period, but also our intention to further increase the share of value-added products in our portfolio,” said Nina Kopola.

Net sales

In January-March 2015, Suominen’s net sales grew by 13.8% from the comparison period to EUR 111.9 million. The strengthening of the US dollar increased the first quarter net sales by 10.2%.

The demand in the European market was improved from the corresponding period in the previous year, but competitive environment remained fierce. In addition, the acquisition of the Brazilian unit in February 2014 contributed slightly to the increase in net sales.

 Suominen’s Convenience business area, which supplies nonwovens as roll goods for wiping products, achieved EUR 102.6 million in net sales. The company’s Care business area, responsible for nonwovens for hygiene products and medical applications, reported net sales of EUR 8.8 million.

Application areas

The main application areas for nonwoven materials supplied by Suominen in January–March were baby wipes (accounting for 41% of the sales), personal care wipes (22%), household wipes (15%), industrial wipes (12%), and hygiene and medical products (8%).

The share of baby wipes in the net sales of increased due to the acquisition of the Brazilian plant, since the plant currently supplies mainly nonwovens for baby care. The share of nonwovens for household wipes decreased from the corresponding period.

Operating profit and result

Operating profit excluding non-recurring items increased by 14.2% and amounted to EUR 7.3 million. There were no non-recurring items in the first quarter of 2015 (EUR -0.2 million).

Operating profit was affected by costs (EUR -0.8 million) arising from the vested share-based incentive plan 2012–2014. The costs of the incentive plan increased from the initial estimate due to the revisions in the number of shares transferred to key employees and the strongly improved share price.

Profit before income taxes for continuing operations was EUR 5.7 million, and profit for the reporting period for continuing operations was EUR 3.5 million.

Business environment

Suominen’s products are used in daily consumer goods, such as wet wipes, hygiene product and medical nonwovens. Europe and North America are the largest market areas for Suominen. Moreover, Suominen gained a foothold in the growing South American markets through an acquisition in February 2014.

In Europe, the confidence of consumers to the improvement of the general economic situation increased markedly in the first quarter of 2015. In the United States, the average consumer confidence index continued to develop favourably in the first quarter, but by the end of March it was lower than it was at the start of the year.

Suominen estimates that in 2015, the growth in the demand for its products will, on average, continue at the pace of 2014.

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