The comparable operating profit also fell by 18% to EUR 14.2 million. Operating profit decreased by 20% and amounted to EUR 14.2 million. The company’s net sales for the period also decreased by 5% from the comparison period last year to EUR 212.7 million. Net sales and operating profit for the second quarter also decreased from the record-high comparison period.

Suominen repeats its previous estimate, disclosed on 28 April, that for the full year 2016 the company expects its net sales and comparable operating profit to improve from year 2015. In 2015, Suominen’s net sales amounted to EUR 444.0 million and comparable operating profit to EUR 31.2 million.

Second quarter performance

“In the second quarter of 2016, the consumer confidence index in the euro zone was behind the level of the corresponding period last year, but rose slightly from the first quarter of 2016. In the United States, the consumer confidence index showed relatively stable development, but remained slightly below the level of the comparison period. Europe and North America are Suominen’s largest market areas,” commented Nina Kopola, President & CEO.

“As we reported in the previous financial report, the sluggish demand early in the year began to show signs of picking up at the end of the first quarter. I am pleased that this positive development carried through into the second quarter. We expect the same trend to continue through the rest of the year and, consequently, our net sales of full year 2016 to improve from year 2015.”

Sales

Net sales in the first half of 2016 were affected by both lower sales prices and volumes compared to last year, approximately in equal proportions. In the first year-half, demand fell short of the strong level of comparison period, particularly due to the soft first quarter of 2016. The changes in US dollar exchange rate had no effect on the net sales during January–June 2016.

Net sales of the Convenience business area were EUR 196.3 million, compared to EUR 207.7 million for the same period last year, and net sales of the Care business area EUR 16.3 million, versus EUR 17.2 in 2015.

The main application areas for nonwoven materials supplied by Suominen in January-June were baby wipes, personal care wipes, household wipes, wipes for workplace use, and hygiene and medical products. The share of nonwovens for baby wipes in the net sales decreased from the comparison period by two percentage points. Of the products with higher added value, nonwovens for household and workplace wipes increased their respective shares in the portfolio.

Operating profit

The operating profit of the comparison period last year was improved by the reversal of the impairment loss due to re-opening of a production line in Nakkila plant in Finland, which has been eliminated from the comparable operating profit of the corresponding period in 2015. Lower net sales and decrease in gross profit affected operating profit. USD/EUR exchange rate fluctuation had no impact on operating profit, the company reports.

In January–June, profit before income taxes was EUR 13.0 million, compared to EUR 15.1 million in 2015, and profit for the second quarter was EUR 8.7 million, compared to EUR 9.7 for the same period in 2015. Decrease in financial expenses and income taxes improved the profit for the period.

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. At these market areas, the growth in the demand for nonwovens has typically exceeded the growth of gross domestic product by a couple of percentage points. Moreover, Suominen has operated in the growing South American markets since 2014.

www.suominen.fi