capital markets day 2015, nina kopola, president & ceo on nov 11
TRANSCRIPT
The first leg of our path to become a Market Driven Product Leader Capital Markets Day, 11 November 2015 Nina Kopola, President & CEO
Our purpose is to make nonwovens continuously better for people.
Suominen in brief
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401.8 net sales in 2014
M€ Nonwovens as roll goods for wiping,
hygiene and medical products
Successful turnaround achieved,
solid financial position
Ambitious growth
strategy to be executed
Operations on three
continents, close to
customers
Some
600 employees
Our purpose is to make nonwovens continuously better for people.
Our business
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Global consumer brands Private label suppliers Healthcare product suppliers Regional converters Retailers
Customers
Eight plants on three continents serve both business areas and create competitive edge
Production
Viscose, pulp, polypropene, polyester All purchased from the market Approximately 50% pulp-based
Raw materials
Convenience Wipes for baby & personal care, household and workplace use; travel & catering
Care Medical products, like swabs; hygiene products, like femcare & adult incontinence
End use applications
Our purpose is to make nonwovens continuously better for people.
Fast transformation into a nonwovens company with operations on three continents
11/11/2015
Net sales by line of business and geographical coverage from 2011 to date.
2011
Three lines of business: Nonwovens Flexibles Codi Wipes
11/1/2011 Ahlstrom Home and Personal acquisition
7/15/2013 Divestment of Codi Wipes
2/10/2014 Acquisition of Brazilian unit
7/14/2014 Divestment of Flexibles business area
4
Our purpose is to make nonwovens continuously better for people.
Leading market position in Convenience, opportunities for growth in Care
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#9 #1 Challenger
in nonwovens for medical & hygiene products (Care business area)
in nonwovens for wipes (Convenience business area)
of all nonwovens suppliers globally
Our purpose is to make nonwovens continuously better for people.
In medical and hygiene, Suominen’s target market is over 2 billion euros
Global nonwovens market totaling ~26 billion euros
Upholstery 10%
Other 27%
Building/roofing 7%
Filtration 9%
Floor coverings 6%
Automotive 5%
Wiping 8%
Medical 3%
Hygiene 25%
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Our purpose is to make nonwovens continuously better for people.
Core of Suominen’s strategy 2015–2017
7
Market Driven Product Leader Vision
Business strategy
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1. Deliver superior value in thoughtfully selected market applications.
2. Drive proactive key account management. 3. Execute demand driven supply chain. 4. Evolve culture and capabilities to build strong product
company.
Our purpose is to make nonwovens continuously better for people Purpose
7
Our purpose is to make nonwovens continuously better for people.
Sustainability agenda 2015–2017
Long-term relations
with customers & suppliers
Supplier Code of
Conduct
Suominen’s purpose
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
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Our purpose is to make nonwovens continuously better for people.
In this strategy period, we aim at growth and shift in product portfolio
41%
15%
12%
22%
8% 2%
2014 (401.8 M€)
Baby wipingHousehold wipingWorkplace wipingPersonal care wipingMedical and hygiene products
2017 (approx. 500 M€)
Illustrative.
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Our purpose is to make nonwovens continuously better for people.
0.9
1.2
1.5 1.61
0
0.5
1
1.5
2
Q3/2014 Q1/2015 Q2/2015 Q3/2015
GDP in Euro area Q4/14–Q3/15
Forecast 2.5
2.9 2.7
2
00.5
11.5
22.5
33.5
Q3/2014 Q1/2015 Q2/2015 Q3/2015
GDP in US Q4/14–Q3/15
Positive trend in market indicators
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-11.3
-6.3 -5.3
-7.1
-12
-10
-8
-6
-4
-2
0
Q4/2014 Q1/2015 Q2/2015 Q3/2015
Consumer Confidence Indicator in Euro area Q4/14–Q3/15
89.8
101.4 101.4 103
88
93
98
103
Q4/2014 Q1/2015 Q2/2015 Q3/2015
Consumer Confidence Indicator in US Q4/14–Q1/15
% %
Our purpose is to make nonwovens continuously better for people.
47%
17%
19%
10% 6%
Baby wiping Personal care wiping Household wiping Workplace wiping Medical & hygiene products
Q1–Q3 2012: 273.0 M€
40%
22%
17%
12%
8%
Q1–Q3 2014: 297.0 M€
Portfolio transformation in progress
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40%
24%
17%
12%
7%
Q1–Q3 2015: 339.8 M€
Our purpose is to make nonwovens continuously better for people.
4.7 % 7.5 %
14.4 %
0%
5%
10%
15%
20%
2012 2013 2014 Q3/15
Net sales growth, %
Solid financial development Progress on mid-term financial targets
12.4 %
15.7 % 17.4 %
0%
5%
10%
15%
20%
2012 2013 2014 Q3/15
ROI, %
- Net sales growth compared with previous year or the Q3 of previous year.
- Target level marked with dashed line. - Figures are of continuing operations.
n/a
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n/a
101.0 96.2
34.7 30.5
0
20
40
60
80
100
120
2012 2013 2014 Q3/15
Gearing, %
Our purpose is to make nonwovens continuously better for people.
Turnaround recognized also by the market
- In Q1–Q3, 35.3% of the average number of shares were traded in Nasdaq Helsinki. - Market capitalization at the end of Q3 was EUR 274.1 million.
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2,300
2,800
3,300
3,800
4,300
4,800
0
50
100
150
200
250
300
350
Number of shareholders Market value, MEUR
Market value, M€ (incl. shares held by Suominen) Number of shareholders
Our purpose is to make nonwovens continuously better for people.
Strategy implementation
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Our purpose is to make nonwovens continuously better for people.
Suominen’s strategy 2015–2017
16
Market Driven Product Leader Vision
Business strategy
11/11/2015
1. Deliver superior value in thoughtfully selected market applications.
2. Drive proactive key account management. 3. Execute demand driven supply chain. 4. Evolve culture and capabilities to build strong product
company.
Our purpose is to make nonwovens continuously better for people Purpose
16
Our purpose is to make nonwovens continuously better for people.
Deliver superior value in selected market applications
Key activities by focus area
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~60 M€ growth investment program, initiatives on three continents
Product development process enhanced
Six new products launched
1
Our purpose is to make nonwovens continuously better for people.
State-of-the-art production line at Bethune plant
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Bethune, SC, US
• The total value of the project will be close to EUR 50 million.
• Andritz was selected as the main supplier and integrator of the project.
• The investment will take the wetlaid technology to a totally new level in the industry.
• At first, the new production line will supply nonwovens for household and workplace wiping as well as for flushable applications.
• The new line will be tailor-made, based on our unique nonwovens technology expertise.
• The line is anticipated to be installed during the second half of 2016.
1
Our purpose is to make nonwovens continuously better for people.
• At Alicante and Paulínia, investments expand the current product offering: - To nonwovens for workplace wipes and
medical applications at Alicante - To nonwovens for medical applications at
Paulínia. • At Alicante and Paulínia, the investments will be
completed during 2015. • At Nakkila, a production line was re-opened in
Q2/2015 to meet the improved demand in Europe.
• The total value of the three investments is approximately EUR 4 million.
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Adding capabilities at Alicante, Paulínia and Nakkila plants
Nakkila, Finland
Alicante, Spain
Paulínia, Brazil
1
Our purpose is to make nonwovens continuously better for people. 11/11/2015 20
Creating world class product development 1
Enhancing capabilities
• Building the innovation machine - Front End Innovation - Creating a prioritized
project portfolio - Introduction of formal
gate process for running projects
Enhancing capacity
• Creating critical mass - R&D expenditure to
increase to above 1% of net sales (0.7% in 2014)
- Four new people employed in 2015, two of them PhDs
- Centralizing resources
Our purpose is to make nonwovens continuously better for people. 11/11/2015 21
Six new products launched Five for Care, one for Convenience business 1
Our purpose is to make nonwovens continuously better for people.
Drive proactive key account management for mutual value creation
Key activities by focus area
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Creating value together with customer
Listening to the customer 2
Our purpose is to make nonwovens continuously better for people.
• Customer perception study was conducted as base to understand the main development points as well as strengths.
• Will be utilized in developing account management model.
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7.32
“Overall our relationship is solid. There is a good amount of cooperation back and forth. They are a valued and important supplier in our business and we see that for years to come.
Listening to the customer (Convenience) 2
“… I would like to see added value around innovations, new product development, exclusive access and technology. Those are benefits that I know they give to other customers, but I haven’t seen in with Suominen.”
Our purpose is to make nonwovens continuously better for people.
Agenda excerpts • Trends and drivers in wipes markets • Peek to the world of social media – We Love Wipes in action • News from Suominen product portfolios • Brief Introduction to Suominen SPC™ technology • HYDRASPUN® Dispersible Plus – Performance and pleasure • Sustainability - What does it mean to you? How does pulp producer view
sustainability. - Speech and facilitation by Päivi Makkonen, Director, Metsä Group
• Tour at Cressa plant
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Creating value together with customers 2
Our purpose is to make nonwovens continuously better for people.
Execute demand driven supply chain
Key activities by focus area
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Defining and implementing standardized global processes
3
Comprehensive ICT systems renewal
Our purpose is to make nonwovens continuously better for people.
Market Driven
Product Leader
Agile transformer
Global footprint
Innovative
Leadership for excellence
Opportunity to product
Demand to capability
Order to cash
ICT system renewal
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Vision Strategic capabilities
Core processes
Process framework
Standardized global processes at the core of way of working 3
Our purpose is to make nonwovens continuously better for people. 11/11/2015 27
Key drivers
• Findings in process harmonization project
• Current systems not fully supporting new business requirements
• Ambitious strategic targets
₋ Vision to become a market-driven product leader
₋ Growth strategy
Targets
• Utilize industry best-practices & strengthen our lead in the strategic areas
• Globally harmonized processes, e.g. order and account management
• Efficient supply chain • Smooth interplant cross-
qualification • Retain cost-conscious
way of working
ICT systems renewal: drivers and targets 3
Our purpose is to make nonwovens continuously better for people.
Evolve culture and capabilities to build strong product company
Key activities by focus area
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4
Pivotal recruitments building new and enhanced capabilities in several areas
Non-discrimination & equal opportunities program launched
Our purpose is to make nonwovens continuously better for people.
Next steps towards our vision to be a Market Driven Product Leader
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Drive through the initiated
programs
Capitalize on new investments to drive growth
in chosen applications and
markets
Intensify product development activities with
increased number of new
product launches
ICT systems renewal
Enhanced focus on
Account management
and commercial excellence
Further development of capabilities
for product leadership
Our purpose is to make nonwovens continuously better for people.
Execution proceeds as planned on all fronts
2015
2016
2017
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Growth investment program in full speed Focused actions in Business areas Product development capability improvement
Bethune investment completed ICT systems renewal Enhanced account management
Net sales in the vicinity of 500 M€