ANNUAL REPORT
2020
THIS IS SUOMINEN
Suominen manufactures nonwovens as roll goods for
wipes and other applications. Our vision is to be the
frontrunner for nonwovens innovation and sustainability.
The end products made of Suominen’s nonwovens are
present in people’s daily life worldwide. Suominen’s net
sales in 2020 were EUR458.9 million and we have nearly
700 professionals working in Europe and in the Americas.
Suominen’s shares are listed on Nasdaq Helsinki.
Net sales, EUR million
458.9
Operating profit, EUR million
39.5
Employees
689
Share of new products
from net sales over
25%
CONTENTS
Suominen in brief…2
Suominen today…3
President & CEO’s review…4
Financial targets…7
Key figures… 8
How we create value…9
Operating environment…12
Strategy… 14
Sustainability…17
Sustainability at Suominen…18
People and safety…21
Low impact manufacturing…27
Sustainable nonwovens…31
Corporate citizenship…33
Stakeholder dialogue…35
Tax footprint… 37
Reporting principles…40
GRI index…41
GRI appendix…46
Our management approach…50
Corporate Governance…51
Corporate Governance Statement…52
Remuneration Report…62
Board of Directors…71
Executive Team…72
Financial information…73
Report by the Board of Directors…75
Consolidated financial statements (IFRS)…92
Key ratios per share…154
Parent company financial statement (FAS)…158
Proposal by the Board of Directors for distribution of funds… 171
Auditor’s report…172
Key ratios…176
Information for shareholders…181
Suominen manufactures nonwovens as roll goods for wipes and other
applications. The end products made of Suominen’s nonwovens are present
in people’s daily life worldwide.
Suominen’s net sales in 2020 were EUR 458.9 million and we have nearly
700professionals working in Europe and in the Americas. Suominen’s
shares are listed on Nasdaq Helsinki.
SUOMINEN TODAY
Our vision
is to be the
frontrunner
for nonwovens
innovation and
sustainability
Europe 37%
37.02
Americas 63%
62.98
Net sales by business area
Europe 37%
Americas 63%
459
EUR million
1
Suominen has two business areas, the Americas and
Europe. In 2020, net sales of the Americas business
area amounted to EUR 289.1 million and net sales of
theEurope business area to EUR 169.9 million.
FINLAND 129
Nakkila
Helsinki, Head oce
ITALY 137
Cressa
Mozzate
SPAIN 67
Alicante
BRAZIL 55
Paulínia
USA 304
Windsor Locks
Green Bay
Bethune
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3Suominen Annual Report 2020
2020 was the first year of implementing
our new strategy, which was published in
January. The target of our strategy is to
grow and improve our profitability. During
the year we announced three investments
in line with our strategy, two in Italy and
one in the United States, as well as a
cooperation agreement with Ahlstrom-
Munksjö’s Ställdalen plant in Sweden.
Our net sales increased by 11.5% to
EUR458.9 million, mainly due to higher
sales volumes. The single biggest factor
in our sales growth was the increased
demand for wiping products due to the
coronavirus pandemic. New products
accounted for over 25percent of our
net sales also in 2020; by new products
we mean products launched less than
three years ago. This reflects our strong
commitment to R&D and our ability to
meet our customers’ needs.
Our operating profit improved
significantly to EUR 39.5 million in 2020.
This was due to higher production and
sales volumes, favorable raw material
prices, and better production and raw
material eciency.
Consistent progress
in sustainability
Sustainability is a cornerstone of our
strategy and we are continuously
developing new, environmentally friendly
products. We launched several products
made from biodegradable, renewable
plantbased fibers in 2020. Sustainability is
also important to our customers and other
stakeholders – I believe that sustainable
products will continue to provide
acompetitive edge for us.
During the year, we published our
sustainability agenda and the related
targets and KPIs. Our agenda focuses
on four themes: people and safety,
sustainable nonwovens, low-impact
manufacturing, and corporate citizenship.
We have defined concrete targets
and plans for each theme, and we are
systematically progressing towards
ourtargets.
Occupational safety is a key priority
for us, and our target is to have zero lost
time accidents. We progressed well in this
respect in 2020, with only one lost time
accident being reported at our production
sites. Our second people related target is
to strengthen our employee engagement.
In terms of environmental impact, we
are committed to continuously improving
our operational eciency and ecient
use of natural resources. We aim to reduce
our energy consumption, greenhouse gas
emissions, water consumption and landfill
waste by 20% per ton of product by 2025,
compared to the base year of 2019. We
successfully made headway towards these
targets in 2020.
Regarding sustainable nonwovens, our
target is to grow our sales by 50% by 2025,
and to launch more than 10 sustainable
products each year. Sales of these
products grew by 22.5% and we launched
nine sustainable products in 2020.
For us sustainability is not only about
environmentally friendly products and
minimizing the environmental impact
of our operations; we highlight the
The coronavirus pandemic created challenges
for both societies and companies in 2020.
COVID-19 aected also all activities at
Suominen, but with comprehensive safety
measures we were able to ensure the safety
of our personnel and to run our operations.
Financially 2020 was a record year for us.
This is Suominen | Sustainability | Corporate Governance | Financial Information
5Suominen Annual Report 2020
importance of sustainable business
practices throughout our value chain.
Accordingly, we renewed our Code of
Conduct in 2020.
We will continue to implement our
strategy through our focus areas
We have divided our strategy
implementation into five areas:
Operational excellence, Sustainability
leadership, Dierentiate with innovation
and commercial excellence, Great place
to work and Dual operating model.
Our strategic focus areas will continue
to guide our work in 2021. We are
continuously improving the eciency
and quality of our operations and
promoting the health and safety of our
employees. We leverage our unique
asset base and pioneering know-how in
nonwovens to strengthen our leadership
position in sustainable nonwovens.
We serve our customers with the best
products and services, and we harness
our organization’s positive energy and
commitment to deliver results.
Towards the future
Looking at the year 2021 ahead we see
twofold development. The pandemic has
increased consumption of nonwovens
Operating profit, EUR million
39.5
Net sales, EUR million
458.9
Sales of sustainable
products increased*
22.5%
EBITDA, EUR million
60.9
in all our markets and the demand is
expected to continue on a high level.
In the long term, COVID-19 may lead
to a sustained increase in the use of
nonwovens for cleaning and disinfection
products. However, the risks related to
the pandemic remain relevant. These
risks include potential shortages of raw
materials, issues linked to logistics as well
as potential closures of customers’ or
our own plants due to virus infections or
authority decisions.
Our priority continues to be
safeguarding the health and safety of
our employees and our ability to serve
our customers. We will also continue the
systematic implementation of our strategy.
Our strong financial performance in
2020 places us in a good position going
forward.
To finish, I would like to thank our
personnel for their commitment during
the challenging year of 2020, and their
contribution in achieving our record result.
I would also like to thank our customers,
shareholders, and other stakeholders for
their good cooperation.
Petri Helsky
President & CEO
* Compared to base year 2019
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6 Suominen Annual Report 2020
Palkit ja käppyrä
Net sales
2018
431.1
2019
411.4
2020
458.9
Net sales, EUR million
0
100
200
300
400
500
458.9
411.4
431.1
EUR
million
2020
2019
2018
1
Palkit ja käppyrä
2018 2019 2020
25.6
33.7 60.9
5.9 8.2 13.3
5
10
15
20
0
20
40
60
80
2018
2019*
2020
60.9
33.7
25.6
EUR
million %
*Including the eect of IFRS 16 Leases
Earnings before interest, taxes,
depreciation and amortization (EBITDA)
and EBITDA margin
2
Palkit ja käppyrä
Gearing, %
2018 2019 2020
2018
54.2
50.7 25.4
Gearing, %
0
20
40
60
80
2018
2019
2020
25.4
50.7
54.2
3
EBITDA margin
by 2025:
above
12%
Net sales growth
during the period:
above relevant
market growth
Gearing
during
the period:
40–80%
including the eect of
IFRS 16 Leases
FINANCIAL TARGETS
Targets 2020–2025
How to get there?
GROWTH PROFITABILITY GEARING
Sustainable products growing above
the market
Innovation to capture the market growth
Targeted investments to meet
the growing demand
Eective utilization of production lines
Margin improvement through new products
as well as production and raw material
eciency
Continued fixed cost control
Balanced investment plan
Maintain healthy cash flow from operations
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7Suominen Annual Report 2020
KEY FIGURES
FINANCIAL 2020 2019
Net sales, EUR million . .
EBITDA, EUR million . .
Comparable operating profit, EUR million . .
Profit for the period, EUR million . .
Earnings per share, EUR . .
Dividend and return of capital per share, total, EUR* . .
Cash flow from operations, EUR million . .
Cash flow from operations per share, EUR . .
Capital expenditure, EUR million . .
Equity ratio, % . .
Equity per share, EUR . .
Gearing, % . .
Return on invested capital (ROI), % . .
EMPLOYEES 2020 2019
Number of employees, average
Number of lost time accidents
*In 2020, proposal by the Board of Directors to the Annual General Meeting
Palkit ja käppyrä
Net sales
2018
431.1
2019
411.4
2020
458.9
Net sales, EUR million
0
100
200
300
400
500
458.9
411.4
431.1
EUR
million
2020
2019
2018
1
Palkit ja käppyrä
Gearing, %
2018 2019 2020
2018
54.2
50.7 25.4
Gearing, %
0
20
40
60
80
2018
2019
2020
25.4
50.7
54.2
3
Palkit ja käppyrä
2018 2019 2020
Dividend
4.6 8.1 39.5
Comparable operating profit,
EUR million
0
10
20
30
40
50
2018
2019
2020
39.5
8.1
4.6
4
Palkit ja käppyrä
2018 2019 2020
Profit for the period
-1.7
0.2
30.1
Earnings per share, EUR
-0.03
0 0.52
Profit for the period, EUR million
and earnings per share, EUR
-0.20
0.00
0.20
0.40
0.60
-5
5
15
25
35
2018
2019
2020
30.1
0.2
-1.7
EUR
Earnings per share, EUR
EUR
million
6
Palkit ja käppyrä
2018 2019 2020
Cash flow from
operations
0.56
Cash flow from operations, EUR million and
cash flow from operations per share, EUR
0.00
0.30
0.60
0.90
1.20
0
15
30
45
60
2018
2019
2020
57.0
29.9
32.1
EUR
Cash flow from operations per share, EUR
EUR
million
7
Palkit ja käppyrä
2018 2019 2020
Dividend per share,
EUR*
0.00 0.05 0.2
Dividend per share, EUR
0.00
0.05
0.10
0.15
0.20
2018
2019
2020
0.20
0.05
0.00
*Proposal by the Board of Directors
to the Annual General Meeting.
Dividend and return of capital.
*
5
This is Suominen | Sustainability | Corporate Governance | Financial Information
8 Suominen Annual Report 2020
Converter,
e.g., wet wipe
manufacturer
Fiber producer
Nonwovens
manufacturer,
Suominen
Brand owner
Consumer
Primary
production
Retailer
HOW WE CREATE VALUE
Suominen is a nonwovens manufacturer operating in global
markets. Suominen creates value by taking fiber raw materials
and turning them into nonwovens that our customers convert
into both consumer and professional end products.
This is Suominen | Sustainability | Corporate Governance | Financial Information
9Suominen Annual Report 2020
Value creation model
FINANCIAL RESOURCES
- Total equity: EUR 145.9 million
- Total liabilities: EUR 171.5 million
NATURAL RESOURCES
- Water 7,074,528 m
3
- Raw materials
- Wood-based 54%
- Oil-based 44%
- Other 2%
- Energy 1,989,957 GJ
- Natural gas 42%
- Grid electricity 37%
- Steam 21%
INTELLECTUAL CAPABILITIES
- Suominen brand and our way of operating
- R&D expenses EUR 2.8 million
- 15 R&D professionals
- 55 granted and 17 pending patents
- 54 trademarks and design patents
- Piloting facility
- Technical knowhow
- IT systems
SOCIAL RELATIONSHIPS
- Customer and supplier relations
- R&D cooperation with stakeholders
- Consumer dialogue
- Manufacturing partners
- Professional networks
- Memberships in associations
- Local communities
MANUFACTURING RESOURCES
- Geographically and technically broad
manufacturing base
689 employees
on average
8 production plants
on three continents
Net sales
EUR 458.9 million
SUOMINEN’S STRATEGY:
GROWTH AND PROFITABILITY
We will grow by creating innovative and more
sustainable nonwovens for our customers and
improve our profitability through more ecient
operations and a high performance culture.
Our main focus is on wipes. We will strengthen
our capabilities in Europe and Americas, and
evaluate opportunities in Asia.
INPUTS SUOMINEN
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10 Suominen Annual Report 2020
CUSTOMERS
- Improved product performance
- Suominen brand value
- Customer satisfaction
EMPLOYEES
- Wages and salaries EUR 41.3 million
- Professional development
- Fair employment practices and equal opportunities
- Safe workplace: 1 lost time accident
PARTNERS
- Spend on materials and services EUR 313.9 million
- Business growth
- Ethical business
- Interest to creditors
SHAREHOLDERS
- Dividend and return of capital
(Board’s proposal) EUR 11.5 million
ENVIRONMENT
- Waste and emission load from operations
and end products
- Sustainable product portfolio includes
compostable and dispersible end products
- No untreated water discharge
SOCIETY
- Corporate income tax EUR 3.8 million
- Employment
PRODUCTS AND SOLUTIONS
- Nonwovens for wipes and other applications
WASTE
- Waste to landfill 4,062.6 tons
EMISSIONS
- Direct greenhouse gas emissions
45,423 tons of CO₂e
- Indirect greenhouse gas emissions
74,197 tons of CO₂e
WATER
- Treated water from operations
How does the model work?
Suominen’s value creation model depicts our whole value
creation process: the resources we utilize in executing our
strategy, the outputs and, ultimately, the impacts of our
business activities.
The value creation basically describes our business in a
nutshell which means that only the most essential matters
are listed. Still, not all matters described bear equal
importance, nor is their respective relevance presented
in the model. That’s why the model should be reviewed
primarily as a whole.
In the value creation model inputs are what we utilize in
our business activities. The Suominen section describes
Suominen’s business and operations briefly.
Outputs are the outcomes of our business activities and
impacts describe how our business activities aect the
world around us.
OUTPUTS
IMPACTS
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11Suominen Annual Report 2020
The global demand for nonwovens
is growing continuously. The growth
depends mainly on consumer demand,
which is a combination of the general
economic situation and consumers’
confidence in the development of their
personal finances. However, demand
for fast-moving consumer goods – that
is, end products for which most of
Suominen’s products are used – is not
very cyclical in nature.
The operating environment was highly
marked by the COVID-19 pandemic in
2020. Where other business activities
were shut down by the authorities, our
nonwovens production was classified
as essential in fighting the pandemic.
We were able to run our operations with
limited impacts due to implementing
strict safety procedures to minimize the
risk of workplace infections very early in
the spring. Throughout all this time, our
primary focus has been in safeguarding
the health and safety of our employees
and to maintain business continuity.
The pandemic increased sales volumes
in all our markets and we expect the
demand to continue on a high level.
In the long term, COVID-19 may lead
to a sustained increase in the use of
nonwovens for cleaning and disinfection
products.
Megatrends
Global megatrends set a solid base for
our strategy and support our growth
forecasts thanks to their impact on
consumer behavior. The megatrends
relevant to Suominen include population
growth, growing global middle class, aging
population, increasing consciousness of
health, well-being and environment, rising
healthcare expenditure, and individualism
including demand for “made for me”
products.
There is a direct correlation between
the rise in the standard of living and, for
example, demand for hygiene products.
The rise in the standard of living combined
with evolving lifestyles is reflected in the
consumer behavior of the prospering
middle class. In addition to essential
commodities, the consumption of this
demographic will center around solutions
that make daily routines easier and less
time-consuming. The use of household
wipes and beauty care wipes are examples
of this phenomenon.
With the aging of the population
and changing healthcare models, new
needs are emerging and the demand for
nonwovens used in, for example, medical
applications and incontinence products is
increasing. On the other hand, the need
to find cost-eective solutions to combat
OPERATING ENVIRONMENT
Suominen is the global market leader in nonwovens for wipes, and among
the largest spunlace nonwovens producers in the world. Our main market areas
are Europe and North America. We also hold a strong position in the South
American markets.
The operating
environment
was highly
marked by
the COVID-19
pandemic in
2020
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12 Suominen Annual Report 2020
EUROPE AMERICAS
COVID-19
impacts
The COVID-19 pandemic has increased consumption of nonwovens in all our markets and the demand is expected
to continue on a high level. In the long term, COVID-19 may lead to a sustained increase in the use of nonwovens for
cleaning and disinfection products. However, therisksrelated to thepandemicremain relevant. Theserisksinclude
potentialshortages of rawmaterials,issues linked to logistics as well aspotentialclosures of customers’ or our own
plantsdue to virusinfections or authority decisions.
Market
characteristics
Europe
In Europe, all consumer wipe categories are highly
fragmented and competitive.
Single-Use Plastic directive is important topic for
nonwovens industry driving sustainability.
Leading trends in Europe are ethical living (e.g. cruelty free,
vegan) and sustainability (e.g. plastic free movement).
North America
North America is the largest consumer market for wipes.
All wipes categories are growing with particularly strong
growth in private label, winning share from brands.
Household products have a fairly big share in the North
American wipes market.
Leading trends are transparency in the value chain and
fewer and more natural ingredients.
South America
South American market is dominated by baby category
and by branded players, but other segments are growing.
Rising consumer awareness, high focus on sustainability
and reducing single-use plastic products are the leading
trends.
Suominen
Net sales of the Europe business area were
EUR169.9million, corresponding to 37% of Suominen’s
net sales in 2020. Suominen had 333 employees in Europe
in 2020. Suominen has two plants in Italy, one plant in
Spain and one plant in Finland. Suominen’s headquarters
is located in Helsinki, Finland.
Net sales of the Americas business area were
EUR289.1million, corresponding to 63% of Suominen’s
net sales in 2020. Suominen had 359 employees in the
Americas in 2020. Suominen has three plants in USA and
one plant in Brazil.
bacteria and viruses is also contributing to the increase
in demand for nonwovens.
Increasing need for sustainable products
Consumer behavior, legislation and regulations are
driving the market towards more sustainable products.
In Europe, one of the most significant changes in
operating environment is the European Plastic Strategy
and European Commission’s Single-Use Plastics Directive
(SUPD). The directive aims to protect the environment
and to reduce marine pollution.
Initiatives similar to SUPD have emerged also in
other regions. Concern over sewer blockages and
marine pollution caused by, among other reasons, the
inappropriate disposal of nonwoven products have been
raised in some regions.
SUPD impacts end products made of nonwovens since
many wet wipes are traditionally made of at least partially
raw materials containing plastics. Labeling requirements
under the Directive for products containing plastic will
enter into force in summer 2021.
The demand of sustainable nonwovens is growing
and there is clear need to develop more ecological
alternatives. Suominen is well placed to respond to this
market change.
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13Suominen Annual Report 2020
STRATEGY
At the beginning of 2020, we published our new strategy for the period
2020–2025 and started to implement our five strategic focus areas.
Thecore in our strategy is sustainability, and our sustainability agenda fully
supports our achievement of our targets.
Strategic
focus areas
Operational
excellence
Sustainability
leadership
Dierentiate
with innovation
and commercial
excellence
Great place
to work
Dual operating
model
Values
Ownership Teamwork Performance Integrity
Mission
Enabling our customers to win
by creating quality nonwovens
Strategy: Growth and profitability
We will grow by creating innovative and more sustainable nonwovens for our customers and improve our
profitability through more ecient operations and a high performance culture. Our main focus is on wipes.
We will strengthen our capabilities in Europe and Americas, and evaluate opportunities in Asia.
Vision
Frontrunner for nonwovens
innovation and sustainability
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14 Suominen Annual Report 2020
Suominen’s vision is to be the frontrunner for nonwovens
innovation and sustainability and our
mission is to enable
our customers to win by creating quality nonwovens. The
main objectives of our strategy are growth and improved
profitability. We pursue growth by creating innovative
and more sustainable nonwovens for our customers
and improve our profitability through more ecient
operations and a high performance culture. Our focus is
on wipes. We strengthen our capabilities in Europe and
the Americas and evaluate our opportunities in Asia.
We execute our strategy through our five strategic
focusareas.
Focusing on operational eciency
In our Operational excellence focus area, we
continuously improve the eciency and quality of our
operations, promote occupational health and safety of
our employees and increase cost awareness throughout
the organization.
Within the framework of our World Class Operations
program, we continue to systematically develop our
operations and enhance our performance and cost
eciency. A concrete example of our continuous
improvement approach is the regular sharing of best
practices between our plants to further improve our
operational eciency.
Occupational safety is a key topic for us, and we
systematically strengthen our safety culture and
employees’ safety awareness by taking into use the best-
in-class practices, tools and systems. The COVID-19
pandemic has required even more attention to health
and safety issues than normally. Since the beginning
of the pandemic we have focused on safeguarding our
employees’ health through extensive global and local
safety measures and protocols.
Taking sustainability to the next level
The goal of our Sustainability leadership focus area is to
leverage our pioneering fiber-based nonwovens know-
how and our unique asset base to achieve a leading
position in the sustainable nonwovens market. Many of
the biggest global challenges and concerns of our time
are related to environmental issues. As part of this de-
velopment, the demand for sustainable nonwovens is
growing globally. We are leading this market change by
continuously developing new ecological products for our
product oering.
During 2020, we introduced several new sustainable
products made of biodegradable and renewable plant-
based fibers. We are continuing our determined work to
create new sustainable products and, among other things,
investigate opportunities to use new renewable fibers as
raw materials.
We strive to use resources eciently and to operate
with the smallest possible impacts on the environment. In
2020, we set new targets to decrease these impacts and
defined action plans and timelines to reach our targets as
part of our sustainability agenda. Our target is to reduce
our energy consumption, greenhouse gas emissions,
water consumption and waste to landfill by 20% per ton of
product by 2025, compared to the base year 2019.
We also renewed our Code of Conduct during 2020 and
a mandatory training will be arranged to all employees
in2021.
Oering leading innovations and increasing
customer understanding
Through our Dierentiate with innovation and
commercial excellence focus area, we aim to oer best-
in-class products and build closer customer relationships.
Our customer-centric research and development focuses
on creating sustainable products, product patterning and
superior dispersibility. In 2020, the share of new products
was over 25% of our net sales.
In 2020, we launched a program to further develop our
sales capabilities and common processes. By strengthening
our commercial excellence, we will be able to reach the full
potential of our competitive advantages. We also further
developed our key account management practices.
During the year, we conducted a global customer
survey to strengthen our understanding of the needs of
our customers to further enhance their experience.
Strengthening employee engagement
Our Great place to work focus area concentrates
on harnessing the organization’s positive energy and
commitment to deliver results. In 2020, we conducted
aglobal employee engagement survey. The results will be
used to create actionable development plans to further
increase our employee engagement.
Strategic
focus areas
Operational
excellence
Sustainability
leadership
Dierentiate
with innovation
and commercial
excellence
Great place
to work
Dual operating
model
Values
Ownership Teamwork Performance Integrity
Mission
Enabling our customers to win
by creating quality nonwovens
Strategy: Growth and profitability
We will grow by creating innovative and more sustainable nonwovens for our customers and improve our
profitability through more ecient operations and a high performance culture. Our main focus is on wipes.
We will strengthen our capabilities in Europe and Americas, and evaluate opportunities in Asia.
Vision
Frontrunner for nonwovens
innovation and sustainability
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15Suominen Annual Report 2020
We continuously develop our processes and practices to
identify excellent performance and to reward for it through
a pay-for-performance compensation model. In 2020, we
revamped our job architecture and further improved our
rewarding and performance development processes.
Optimizing our operating models
The goal of our Dual operating model focus area is to
optimize our operations by introducing separate operating
models for specialty and standard business. We allocate
standard products into the production lines that are best
CASE | Strategy
IMPLEMENTING NEW
STRATEGY
Our new strategy, aiming at growth and
profitability, was introduced in January 2020,
followed by a townhall event in each location
where everyone had a chance to get more
information and ask questions. Based on the new
strategy, we identified 12 strategic objectives and
established projects for each to drive actions to
reach them.
We measure the results of this work with
company’s KPIs and the results are reported
regularly to the whole organization. Managers also
talk about the strategy in their teams. According
to a survey conducted in November, personnel
feedback to our strategy communication has been
really positive.
Anna Savo
Manager, Strategy
Implementation &
Process Excellence
suited for them, while making specialty products on
smaller and more flexible production lines.
In 2020, we defined targets and KPIs related to
optimization of operating models and developed an asset
strategy for all our production lines. We will continue to
implement operating models which enable us to deliver
higher volume standard products with improved cost-
eciency and, at the same time, address the more diverse
customer needs concerning specialty products, often
produced in lower volumes.
Investment project started
in Italy to increase the capacity by
restarting an idled line
Investment project started in
Italy to increase capabilities in
sustainable nonwovens
Investment project started in the USA
to increase capabilities to oer new,
innovative products
Cooperation agreement with
Ahlstrom-Munksjö
9 sustainable product launches
Share of new products over 25%
of net sales
Sustainability targets and KPIs defined
Rockline’s Supplier Innovation
Award
Strategic highlights of the year
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16 Suominen Annual Report 2020
As a result of our analysis, the six most
material sustainability topics for Suominen
were chosen: Eco-friendly products,
health and safety, energy eciency,
waste prevention, financial stability and
employee engagement. The results of the
assessment served as the basis for our
sustainability agenda 2020–2025.
Sustainability agenda 2020–2025
Suominen’s sustainability agenda was
published in January 2020. The agenda
crystallizes the sustainability themes and
targets for the strategy period 2020–2025.
The agenda was approved by the Board of
Directors and progress in dierent areas is
regularly monitored.
The agenda focuses on four themes,
People and safety, Sustainable nonwovens,
Low-impact manufacturing and Corporate
citizenship.
SUSTAINABILITY AT SUOMINEN
Sustainability is at the core of our strategy and business. Our vision is to be
the frontrunner in nonwovens innovation and sustainability. Sustainability is
an integrated part of all our operations.
Materiality
Identification of the most material aspects
of sustainability helps us to prioritize
our work and eorts in this area. At
Suominen, material sustainability topics
are defined according to their significance
to Suominen’s business and stakeholders’
expectations. A materiality assessment was
conducted in 2019. The process included
a stakeholder survey sent to stakeholders
such as customers, employees,
institutional investors, suppliers, industry
associations and owners, and interviews
with key stakeholders. The current
business environment and key market
drivers aecting the industries in which
Suominen and its customers operate were
also reviewed as part of the process. The
topics were then assessed — on the basis
of their importance to Suominen and its
stakeholders — at an internal workshop
involving key experts and management.
Suominen’s
sustainability
agenda was
published in
January 2020
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18 Suominen Annual Report 2020
We invest
in increasing
employee engagement.
We continue to build a high
performance culture.
We continue to strengthen
our safety culture.
People and safety
Sustainable nonwovens
Low impact manufacturing
Corporate citizenship
We are
the frontrunner
in sustainable
nonwovens.
We promote responsible
business practices in our
operations and supply chain.
We communicate openly
and transparently about
our operations.
We continuously strive to
decrease environmental
impacts of our
operations.
Sustainability agenda 2020–2025
Most relevant UN Sustainable Development Goals for Suominen
SDG 8: Decent work and economic growth
Suominen promotes responsible business practices
throughout the value chain and does not tolerate
slavery, forced or child labor, or human tracking
in any form in its own or its suppliers’ operations.
Suominen promotes equal opportunities for all. Our
principle is “equal pay for an equal contribution”. A safe workplace is
one of our top priorities, and we are continuously striving to improve
our safety culture in order to achieve an accident-free workplace
SDG 12: Responsible consumption and production
Our goal is to use natural resources as eciently
as possible and strive for minimization of waste in
production, by recycling and finding alternative
outlets for non-recyclable waste. With our product
oering, we contribute to this goal by taking account of the entire
value chain in our product design, in order to decrease any negative
impacts on the environment. We publicly report our activities and
progress towards our sustainability goals.
SDG 13: Climate action
Suominen is committed to reducing the greenhouse
gases emitted due to its operations, by improving its
energy eciency and finding alternative low-carbon
energy sources. With our product oering, we are
contributing to this goal by calculating the carbon
footprint of our products and developing solutions with a smaller
climate impact.
This is Suominen | Sustainability | Corporate Governance | Financial Information
19Suominen Annual Report 2020
Our sustainability targets and key performance indicators (KPIs)
INDICATOR TARGET FOR 2025 RESULT FOR 2020 PROGRESS
People
and safety
Lost time accident 0 1 In progress
Employee engagement index 73% 69% In progress
Sustainable
nonwovens
Number of sustainable
product launches
Over 10 per year 9 In progress
Sales of sustainable products 50% increase in sales
1
22.5% increase in sales
1
In progress
Corporate
citizenship
Coverage of renewed
Codeof Conduct
100% of existing employees
and new hires
Code of Conduct renewed In progress
Supplier audits Raw material suppliers
audited against supplier code
(based on risk assessment)
Auditing process planning
ongoing
In progress
Low impact
manufacturing
Energy consumption
(GJ/t of product)
20% reduction
1
8.0% reduction
1
In progress
Process waste to landfill
(kg/t of product)
20% reduction
1
2.4% reduction
1
In progress
Water consumption
(m
3
/t of product)
20% reduction
1
12.2% reduction
1
In progress
Greenhouse gas emissions
(t/t of product)
20% reduction
1, 2
14.9% reduction
1, 2
In progress
¹ Compared to the base year 2019
² Target is set for Scope 1 and 2 emissions(emissions from our own operations and purchased energy generation)
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20 Suominen Annual Report 2020
Occupational safety and the overall well-being of employees is a priority for
Suominen. We invest in increasing employee engagement. We continue to build
a high performance culture and to strengthen our safety culture.
PEOPLE AND SAFETY
This is Suominen | Sustainability | Corporate Governance | Financial Information
21Suominen Annual Report 2020
Our people
In 2020, our operating environment was significantly impacted by the COVID-19
pandemic. Securing the health and safety of our nearly 700 employees was a top
priority for Suominen. In our development work, we focused on understanding
the level and drivers of our employee engagement and on enhancing our
processes to promote a high performance culture.
Safeguarding our employees
The COVID-19 pandemic aected the
operating environment of companies
around the world in many ways. For
Suominen, securing the health and
safety of its employees is in all situations
of the utmost importance. In 2020,
we implemented various safety and
other precautionary measures, and we
continuously monitored the development
of the pandemic.
At the beginning of the pandemic, a
COVID-19 task force with participants
Securing the
health and safety
of our employees
is of the utmost
importance in all
situations
from all our locations was established,
and it held weekly – and later biweekly
– meetings. To assess the impact
of COVID-19 in daily work, we also
conducted two pulse surveys among
our employees, one in the spring and
the other in December. A large majority
of the respondents felt that they had
been able to work eectively despite
the pandemic, have confidence in the
company’s response to the pandemic, and
feel safe carrying out their duties during
the pandemic. Thanks to our dedicated
This is Suominen | Sustainability | Corporate Governance | Financial Information
22 Suominen Annual Report 2020
Based on the results, our employee
engagement index is 69%, which is on par
with global manufacturing companies.
The index is a combination of questions
concerning our people’s likelihood to
recommend and stay in the company,
organizational pride, and commitment.
The result means that 69% of the survey
participants responded favorably to those
questions.
Further developing our recruitment and
onboarding processes and the related
experiences is an important long-term
target for us. We will also strengthen and
communicate our employer brand more
actively to increase employee commitment,
retention, satisfaction, and attraction.
In pursuit of high performance
Building a high performance culture is
an important element in Suominen’s
strategy and Sustainability Agenda. We are
aiming for a culture in which people are
encouraged to exceed expectations – to
go the extra mile – and are enabled to
perform to their full potential. To support
the successful implementation of our
strategy and the high performance culture,
we ensure that our employees’ targets and
actions are aligned with the company’s
strategy and objectives.
We continuously develop our processes
and practices to identify, foster, and
reward excellent performance and to drive
a pay-for-performance compensation
model. In 2020, we worked extensively on
our job architecture and further developed
our performance development and reward
systems and processes.
Suominen’s performance development
discussion process consists of regular
employee – manager discussions covering
topics such as success in reaching the
previous year’s targets, setting targets
for the ongoing year, and identifying
Palkit ja käppyrä
2018 2019 2020
Number of
employees, average
676 685 689
Number of employees, average
0
200
400
600
800
2018
2019
2020
689
685
676
8
people and our proactive approach and
actions, the exceptional situation had only
a limited impact on our ability to serve our
customers and to run our operations.
Advancing employee engagement
Increasing employee engagement is one
of our key people-related targets in our
Sustainability Agenda for 2020–2025. As an
important step in this work, we conducted
a global employee engagement survey in
the second half of 2020. The response rate
for the survey was79%.
The survey results identified both
positive areas and opportunities for
improvement. With regard to the positives,
our people appreciate Suominen’s
commitment to safety and sustainability,
know our strategy and what is expected of
them, and have strong confidence in the
company’s future. The opportunities to
further increase the level of engagement
relate to employee feedback and
recognition, communication, and career
development. The results have been
shared with the relevant team leaders to
be further discussed within their teams
and to be used as the basis for creating
targeted, actionable development plans.
We have a follow-up procedure in place to
ensure that the plans are implemented and
to support the systematic development
of our employee engagement and
performance culture.
This is Suominen | Sustainability | Corporate Governance | Financial Information
23Suominen Annual Report 2020
development needs and plans. During the
year, we strengthened the quality of target
setting and promoted a feedback culture
to further enhance the process. In 2020,
the employee – manager discussions
covered 75% of our employees. Our target
for 2021 is to develop and harmonize the
performance and development discussion
process also for our blue-collar employees
globally.
Promoting equal opportunities
Suominen has nearly 700 employees,
representing more than a dozen
nationalities working in eight locations
on three continents. We recognize the
business benefits of having a diverse
workforce and want to oer a fair
workplace with equal opportunities for
everyone. We do not tolerate any kind of
discrimination, including discrimination
based on age, gender, religion, or ethnic
origin. When making employee-related
689
employees
decisions, for example when recruiting,
promoting, rewarding, or developing our
personnel, we pay special attention to
equality.
Supporting personal and
professional development
It is crucial for our success that we
identify and develop the competencies
and capabilities needed to reach our
strategic objectives. An important part
of this is to systematically support our
employees’ personal growth ambitions
and continuous professional development.
In 2020, health and safety issues related
to the COVID-19 pandemic somewhat
slowed our training activities. However,
we started a global program to further
develop our sales capabilities and
common processes, and we also carried
out a number of local training programs
covering topics such as safety, quality, and
best practices.
CASE | Employee well-being
WALKING FOR HEALTH AND
THE AMAZON RAINFORESTS
During a global well-being campaign
in October 2020, our employees who
participated in the campaign walked a total
of 13,400 km which meant virtually passing
through all our locations in Europe and the
US, starting from Helsinki headquarters all the
way to Bethune, South Carolina. By reaching
set milestones our employees were able to
increase the amount Suominen would donate
to charity. Based on the total outcome our
campaign resulted in donating 2,000 Euros to
WWF for their work in protecting the Amazon
rainforests. Safe and energetic walks to
everyone in the future too!
Päivi Nieminen
Senior Specialist, HR
We support
our employees’
personal growth
ambitions and
continuous
professional
development
This is Suominen | Sustainability | Corporate Governance | Financial Information
24 Suominen Annual Report 2020
689
employees
Safety
We focus on safety and accident prevention, and we have a strong safety culture.
The health and safety of Suominen’s employees is ourkey priority.
Progress in safety
Safety is one of our key people-related targets. Our target
is to have zero lost-time accidents (LTA). In 2020, progress
was positive. One LTA occurred at Suominen sites in
2020 (6 in 2019) and seven out of eight sites were able to
reach the zero LTA target in 2020. In 2020, the accident
frequency rate (AFR) decreased to 0.79 (4.95), and the
accident severity rate (ASR) was 0.14 (0.12). We keep
records of all work-related accidents and near misses and
identify their causes.
Safety during the pandemic
The year 2020 was marked worldwide by the COVID-19
pandemic. Our primary focus during the year was to keep
CASE | Safety
SAFETY FIRST
IN DIFFICULT TIMES
The safety of our employees has been a key
priority since the very beginning of COVID-19
pandemic. We have taken strict proactive
measures, e.g. all business traveling is
prohibited, special focus on hygiene has been
paid, and working from home is encouraged
whenever possible. Virtual meetings are
also encouraged. We continue to fight the
pandemic together.
Juan Carlos Esteve
Director, HSEQ
our employees safe and healthy. Suominen monitored
the COVID-19 situation closely and implemented
extensive precautions to protect our employees and to
ensure a safe working environment on our sites. Global
rules and recommendations were implemented, including
a business travel ban, limitations on physical meetings
and plant visits, and other measures. Thanks to our
proactive approach, there were only limited impacts on
our ability to serve our customers and run our operations
during2020.
Our safety work
Suominen’s safety work is based on preventive work,
and Suominen has implemented Life Saving Rules and
This is Suominen | Sustainability | Corporate Governance | Financial Information
25Suominen Annual Report 2020
aBehavior Based Safety program covering
employees working both at Suominen’s
manufacturing sites and at oce premises.
The Behavior Based Safety program
kept rolling for the seventh year in a row
in 2020. The program emphasizes the
individual’s own responsibility in safety and
focuses on influencing the attitude and
motivation of individuals.
The program is implemented through
safety walks, in which an employee walks
through the premises identifying both safe
and unsafe behaviors and conditions, and
then engages in an open discussion with
other employees.
Safety walk training is mandatory for all
new employees as part of their onboarding
process. In 2020, over 11,800 safety walks
were performed globally. Altogether,
1,614 unsafe actions or conditions were
identified that need to be rectified.
However, as a precautionary measure,
safety walks were suspended in early 2020
to ensure social distances in our sites due
to the COVID-19 pandemic.
Suominen develops safety at the
workplace according to the principle of
continuous improvement and constantly
shares the best practices at individual
plants to benefit the entire plant network.
In improving safety, Suominen places
particular emphasis on influencing
attitudes, behavior, and operating models,
and on building a culture of work safety.
Safety monitoring is part of the daily
activities.
In 2021, we will continue on
strengthening our safety culture.
Palkit ja käppyrä
2016 2017 2018 2019 2020
Number of lost
Eme accidents
(LTA)
10 5
4
6
1
Number of lost time accidents
(LTA), own employees
0
2
4
6
2018
2019
2020
1
6
4
9
Palkit ja käppyrä
2016 2017 2018 2019 2020
Accident
frequency rate
9.18 4.06
3.20
4.95
0.79
Accident frequency rate (AFR)
0
1
2
3
4
5
2018
2019
2020
0.79
4.95
3.20
Number of accidents per 1,000,000
working hours
12
Palkit ja käppyrä
2016 2017 2018 2019 2020
Accident severity
rate
0.34 0.15
0.10 0.12 0.14
Accident severity rate (ASR)
0.00
0.05
0.10
0.15
0.20
2018
2019
2020
0.14
0.12
0.10
Number of absence days per 1,000
working hours
11
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26 Suominen Annual Report 2020
LOW IMPACT MANUFACTURING
For Suominen, environmental responsibility means ecient utilization of
resources with smallest possible impacts on the environment. We continuously
strive to reduce the environmental impacts caused by our operations.
The most significant environmental
impacts resulting nonwovens production
include consumption of water and energy,
generation of greenhouse gases, and
landfill waste. We regularly follow these
consumption and emission levels and have
set reduction targets for each of these.
Utilizing
resources
eciently
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27Suominen Annual Report 2020
How do we operate?
Suominen is committed to continuously
improving its production eciency
and the ecient utilization of natural
resources. Environmental responsibility
requires daily commitment and continuous
development. Suominen’s Environmental
Best Practice team shares best practices
and knowledge regarding environmental
matters between our sites and actively
seeks opportunities and solutions to
reduce the environmental impacts from
our operations.
Table 1
Oil-based 44%
44
Wood-based 54%
54
Others 2%
2
Raw materials purchased in 2020
Oil-based 44%
Wood-based 54%
Others 2%
1
We operate according to
the relevant standardized
management systems
We operate according to the relevant
standardized management systems. All
of our sites are certified according to
ISO9001 quality management standard
and 7 out of 8 sites’ environmental
management systems are certified
according to the ISO 14001 standard with
the last one to be certified in early 2021.
In addition, two of our production sites’
energy management systems are certified
according to the ISO 50001 standard and
safety management systems according to
the ISO 45001 standard.
Raw materials
Raw materials play a vital role in our business since they account for
roughly 60–70% of our expenses. Suominen uses fiber materials,
such as cellulose-based fibers, polypropylene and polyester in
nonwovens production. The share of raw materials from renewable
sources accounted for 54% (58% in 2019), most of it being cellulosic
fibers such as viscose and pulp. We support responsible forest
management practices, and we oer nonwovens produced from
FSC
®
(FSC-N002523), PEFC™ and SFI
®
certified raw materials.
Suominen is constantly looking for solutions to decrease the
environmental impacts of nonwoven products throughout the value
chain. The ecient utilization of raw materials is therefore one of our
top priorities. We are continuously working to find ways to improve
our material eciency and we strive for the minimization of waste in
our production by recycling and finding alternative outlets for non-
recyclable production waste.
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28 Suominen Annual Report 2020
Energy
Water
Our energy consumption consists of the usage of gas for heat and
steam generation and the use of purchased electricity and steam.
Out target is 20% reduction in energy consumption per ton of
product by 2025, the baseline being 2019.
In 2020, our energy consumption decreased by 8.0% per ton of
product compared to the year 2019. In order to meet our energy
eciency improvement targets, we are continuing to identify and
implement energy saving initiatives at our plants.
Water is an essential resource for Suominen as it is used in our
nonwovens production processes to bind fibers together into
nonwoven fabrics. Approximately 90% of the water taken into our
processes is returned back to the water bodies or sanitary sewer
systems, which means that only 10% of our water intake is consumed
in our production processes, mainly through evaporation. Our water
use and discharges are regulated by national or regional authorities
and we constantly monitor the quality of discharged water. All water is
treated either in our own or municipal water treatment plants before
discharging. The wetlaid production technology that is used at two
Suominen production sites requires significantly more water than
other production technologies. Wetlaid production accounts for 77%
of Suominen’s total water intake.
Suominen has evaluated the scarcity of water at our sites by using
Water Resource Institute’s Water Risk Atlas. One of our production
sites is located in a “high risk area” where water can be considered
a scarce resource. The water intake of this site accounts for
approximately 1.5% of Suominen’s total water intake.
Our target is 20% reduction in water consumption per ton of
production by 2025, the baseline being 2019.
In 2020, Suominen’s water consumption decreased by 12.2% per
ton of product compared to the year 2019. We managed to improve
our water eciency at most of our production plants.
Palkit ja käppyrä
2019 2020
Energy consumption per ton
of product (indexed)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2019
2020
0.92
1.00
Baseline
Target 2025
2
Palkit ja käppyrä
2019 2020
Water intake
1
0.878
Baseline
1.0
1.0
Target
0.8
0.8
Water consumption per ton
of product (indexed)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2019
2020
0.88
1.00
Baseline
Target 2025
3
Table 1
Natural gas 42%
42.01
Electricity 37%
37.75
Steam 21%
21.02
Other <1%
0.22
Energy consumption in 2020
Natural gas 42%
Electricity 37%
Steam 21%
Other <1%
1
Table 1
Surface water 56%
56
Municipal water
supplies 13%
13
Ground water 31%
31
Water intake by source in 2020
Surface water 56%
Municipal water supplies 13%
Ground water 31%
2
This is Suominen | Sustainability | Corporate Governance | Financial Information
29Suominen Annual Report 2020
Greenhouse gas
emissions
Waste to landfill
Suominen reports its direct greenhouse gas emissions (Scope 1)
and its indirect greenhouse gas emissions from purchased energy
production (Scope 2). Direct greenhouse gases originate from the
consumption of fossil fuels used mainly for the generation of process
heat. Indirect emissions are caused by the production of purchased
electricity and steam.
Our target is 20% reduction in greenhouse gas emissions per ton of
product by 2025, the baseline being 2019.
In 2020, our greenhouse gas emissions decreased by 14.9% per
ton of product compared to the year 2019. Improvements in energy
eciency have a direct impact on our greenhouse gas emissions.
Therefore, all our eorts to improve our energy eciency also
contribute to lower greenhouse gas emissions. We are continuously
looking for also other ways to decrease greenhouse gas emissions
from our operations.
Our target is 20% reduction in waste to landfill per ton of product by
2025, the baseline being 2019.
In 2020 the amount of landfilled production waste decreased by
2.4% per ton of product compared to the year 2019. Four out of our
eight production sites are already generating zero waste to landfill.
In waste management Suominen’s first priority is to prevent waste
generation in the first place by improving its material eciency.
Secondarily, we work actively with partners that can use our waste
material for dierent end uses.
Palkit ja käppyrä
2019 2020
Tons of CO
₂
e
1
0.851
Baseline
1.0
1.0
Target
0.8
0.8
Greenhouse gas emissions* per ton
of product (indexed)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2019
2020
0.85
1.00
Baseline
Target 2025
*Including direct (Scope 1) and
indirect (Scope 2) GHG emissions
3
Palkit ja käppyrä
2019 2020
Tons
1
0.976
Baseline
1.0
1.0
Target
0.8
0.8
Production waste to landfill per ton
of product (indexed)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2019
2020
0.98
1.00
Baseline
Target 2025
4
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30 Suominen Annual Report 2020
SUSTAINABLE NONWOVENS
Consumer behavior and legislation are driving the need for more sustainable
products. By continuously developing new and innovative solutions with a
reduced environmental impact, we are able to provide a comprehensive oering
of sustainable nonwovens for our customers.
Sustainable nonwovens is one of the four
focus areas in our sustainability agenda.
Our target is a 50% increase in sales of
sustainable nonwovens by 2025 compared
to 2019, and to have at least 10 sustainable
product launches per year.
Comprehensive oering
Suominen’s Sustainable Product Portfolio
consists of products made of renewable,
recycled and/or plastic-free raw materials
as well as compostable and totally
dispersible nonwovens. Dierent aspects
of sustainability are important to dierent
customers and by oering solutions in
these dierent categories, we can meet
the varying sustainability-related needs of
our customers and end users.
Suominen is currently measuring the
environmental impacts of its products
Our target is
50% increase
in sales of
sustainable
nonwovens by
2025
This is Suominen | Sustainability | Corporate Governance | Financial Information
31Suominen Annual Report 2020
by calculating their carbon footprint.
This means that greenhouse gases
associated with the product in dierent
stages of its value chain are added up to
gain a full understanding of the climate
impact of each product. By oering
more environmentally sound products,
we are able to help our customers to
reduce the environmental impacts of their
own products and to achieve their own
sustainability goals.
In 2020, our share of sustainable
nonwovens increased by 22.5% and we
launched nine sustainable products.
Sustainable solutions at the center
of our innovation work
Sustainability is one of the focus areas
in our R&D. We strive to reduce the
environmental impact of our products
without compromising excellent
functionalities andquality.
The environmental impacts of the
nonwovens production process comprise
only a part of the total environmental
impacts of nonwoven products. We
are committed to decreasing the
environmental impacts of our products
by taking into consideration the entire
supply chain, such as using raw materials
with lower environmental impacts and
optimizing transportation distances.
To be able to oer even wider range of
sustainable products to our customers
in future, we are constantly researching
new potential fibers. We are actively co-
operating with start-ups as well as well-
established companies that are developing
new innovative fibers.
CASE | R&D
RECORD TIME DEVELOPMENT
PROCESS FOR A NEW
INNOVATIVE NONWOVEN
FOR FACE MASKS
When diculties arose in sourcing high-quality
face masks in Finland during the COVID-19
pandemic in the spring, we started working
towards a solution. With open-minded and
seamless co-operation with our partners, we
succeeded starting the production of FIBRELLA
®
Shield in only six weeks. Normally a process this
kind would take two years. We worked around
the clock and the fact that it was about saving
lives got us all to go the extra mile needed.
Miika Nikinmaa
Manager, R&D
This is Suominen | Sustainability | Corporate Governance | Financial Information
32 Suominen Annual Report 2020
CORPORATE CITIZENSHIP
Suominen operates in a responsible and globally aligned manner. We support
responsible operations in our supply chain and in the society at large by
respecting human rights, being a good corporate citizen and mitigating
environmental impacts caused by our own operations. We adhere to high
ethical standards in all our activities.
Suominen is a global company with
operations on three continents. We
collaborate with a significant number
of stakeholders in a multicultural
environment every day. We develop
our stakeholder relationships in a fair
and responsible way and promote
transparency in our communications.
Through global operations we provide
employment and business opportunities,
generating a positive economic contribution
to the surrounding society. Our tax footprint
arises from the business operations in the
countries where we operate.
We are committed to full compliance with
all applicable national and international laws,
regulations, and generally accepted practices.
We support UN Global Compact. Suominen
refrains from all unfair business practices,
such as fraud, corruption, and bribery.
This is Suominen | Sustainability | Corporate Governance | Financial Information
33Suominen Annual Report 2020
Human rights
Suominen is committed to the United
Nations (UN) Guiding Principles on
Business and Human Rights and the
International Labor Organization
(ILO) Declaration on the Fundamental
Principles and Rights at Work. In our
Code of Conduct Suominen commits to
respecting human rights as an employer.
Suominen does not tolerate any kind
of discrimination, any form of forced or
compulsory labor, or the use of childlabor.
Suominen works consistently to ensure
that human rights are respected across
the value chain. Suominen requires its
raw material suppliers to commit to
ethical conduct, full compliance with all
applicable national laws and international
treaties, and to respect human rights as
set forth in internationally recognized
standards and treaties.
Code of Conduct
Our daily operations are guided by
Suominen’s Code of Conduct and
other related policies which are the
cornerstones of our sustainable business
practices. Suominen renewed its Code of
Conduct during 2020 and it was published
in the first quarter of 2021. The Code of
Conduct states Suominen’s expectations
for doing business responsibly, ethically
and consistently, according to our values,
our policies, and the law. The Code of
Conduct addresses issues such as fair
business practices, financial regulations,
human rights, and environment. The Code
is adopted by the Suominen Corporation
and its subsidiaries and it applies to
everybody working for thecompany,
wherever they are in the world. A
mandatory training program about
the renewed Code of Conduct will be
arranged for all employees in 2021.
Our requirements for our suppliers
are described in the Supplier Code of
Conduct, which discusses issues such as
human rights, wages and working hours,
child labor and forced labor, corruption
and bribery and the environment. We
expect our business partners to act
responsibly and all our suppliers to comply
with our Supplier Code of Conduct.
In accordance with the renewed
sustainability agenda’s targets, we will
establish a process for third party supplier
sustainability audits.
Read more
Suominen‘s Code of Conduct and the
Supplier Code of Conduct can be found at
www.suominen.fi.
We adhere to high ethical
standards in all our activities
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34 Suominen Annual Report 2020
Stakeholder dialogue
Suominen’s stakeholders are entities or
individuals that have an impact on or are
impacted by our business. Our stakeholder
groups dier greatly and thus the focus
areas and the channels of communication
vary according to each groups’ interests
andneeds.
Continuous interaction with our
stakeholders is a key aspect of Suominen’s
approach to sustainability. Stakeholder
dialogue provides important insights
into the expectations and concerns
our stakeholders have and helps us to
identify the opportunities and risks in
our operating environment. We want
to engage in open and continuous
dialogue with our stakeholders and strive
to transparent communication through
various channels.
We want to engage in open
and continuous dialogue
with our stakeholders
Suominen conducts a stakeholder
survey every other year and the latest
survey took place in 2019. At that time,
a public web-based survey for all our
stakeholders was conducted to assess
expectations and to collect information
and insights into how we can develop
our sustainability work further. The web-
based survey was supplemented with
in-depth interviews with selected key
stakeholders. The results were analyzed
in internal workshop and as a result, six
material topics were defined: eco-friendly
products, health and safety, energy
eciency, waste prevention, financial
stability and employee engagement.
In October 2020 Suominen conducted
a global employee engagement survey,
gaining an overall participation rate
of approximately 80 percent of all
employees. The survey identified both
positive areas of impact on employee
engagement, as well as areas of the
greatest opportunity for improvement.
The results are used as a basis for creating
concrete developmentplans. Overall,
Suominen’s employee engagement is at a
good level.
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35Suominen Annual Report 2020
STAKEHOLDER
GROUP
EXPECTATIONS AND
INTERESTS
MEETING STAKEHOLDER
EXPECTATIONS
ENGAGEMENT
CHANNELS
Employees - Safe working environment
- Compensation and benefits
- Development opportunities
- Equal treatment, well-being, and
workplace culture
- Continuous development of safety
at workplace
- Fair and equal compensation and
benefits
- Individual competence
development plans
- HR principles and blind recruiting
- Open communication
- Code of Conduct
- Daily interaction
- Performance development
discussions
- Global intranet, internal newsletter
- Stakeholder survey
- Global employee engagement
survey and local pulse surveys
Suppliers - Long-term partnership
- Open communication and
co-operation
- Co-operation with suppliers
- Smooth and ecient raw material
quality assurance process
- Supplier Code of Conduct
- Supplier meetings and other direct
contacts
- Requests for tender and contracts
- Supplier Code of Conduct
- Stakeholder survey
Customers - Product safety
- Innovation and product
development
- Reducing environmental impact
- Responsible fiber sourcing
- Value for the customer
- Long-term partnership
- Cost competitiveness
- Quality assurance through audits
and certifications
- Sustainable product portfolio
and product development with
customers
- Development of personnel skills
- Open communication and onsite
visits
- Participation to exhibitions and
trade fairs
- Meetings and other direct contacts
- Exhibitions and other industry
events and industry media
- External communication e.g.
customer newsletter
- Audits and certificates
- Stakeholder survey
- Requests for tender and contracts
Investors,
shareholders,
analysts
- Market value and dividends
- Sustainable growth
- Accurate, consistent, and reliable
information
- Risk assessment and management
- Product development
- Sustainability
- Communication based on Finnish
laws, EU directives, stock exchange
rules and regulations
- Implementation of our strategy
aiming for growth and profitability
- Implementation of our
sustainability agenda
- Transparent reporting,
responsibility reporting based on
GRI standard
- Annual General Meeting
- Quarterly and annual reporting
- Stock exchange and press releases
- Shareholder and analyst events
- Website and other digital channels
- Stakeholder survey
Political decision-
makers, public
authorities, NGOs
- Regulatory compliance
- Responsible supply chain
- Responsible operations
- Compliance with laws and
regulations
- Whistleblowing channel
- Responsibility reporting based on
GRI standard
- Reporting and other external
communication
- Direct contacts
Society and local
communities
- Fair employment practices
- Responsible and sustainable
production
- Regulatory compliance
- Tax contribution
- Jobs and fair compensation
- Good corporate citizenship
- Tax contribution
- Media
- External communication
- Events
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36 Suominen Annual Report 2020
Tax footprint
Suominen’s tax footprint represents the
economic impact on society arising from
Suominen’s operations in the countries
where it operates. Suominen’s business
operations result in liabilities to pay
taxes and similar payments, as well as
in a liability to collect and remit taxes
and similar payments that arise from the
business activities of the group companies.
Suominen’s tax footprint arises from the
business operations in the countries where
it operates. Suominen has not entered
into any arrangements aiming to change
or rearrange its tax burden from what
arises from normal business operations.
The trading of goods between Suominen
group companies is extremely limited. The
group companies receiving intra-group
services are charged a service fee. The
pricing of the service fee is in line with the
arm’s length principle.
Suominen has companies only in
those five countries – Brazil, Finland,
Italy, Spain and the USA – where it has
both production and sales operations. In
respect of taxes and similar payments,
Suominen applies the laws and regulations
of each country.
Suominen’s tax footprint includes not
only the taxes and similar payments that
are group companies’ costs, but also
the taxes and similar payments which
the group companies collect and remit,
such as indirect taxes. Deferred taxes
which arise from the timing dierences
between taxation and accounting and are
recognized in accounting are not included
in the tax footprint.
The main markets of the Finnish group
companies are abroad. Due to this,
the export sales of these companies
significantly exceed their domestic sales.
No value added tax is levied on export
sales. This leads to a situation where the
Finnish group companies’ deductible value
added tax on their purchases subject to
value added tax is considerably higher
than the value added tax they remit
based on their taxable sales. As a result,
Suominen receives a refund of value
added tax in Finland.
In 2020, Suominen employed on
average 689 people in its operations. As
a result, Suominen generated a positive
economic contribution to the surrounding
society in the form of employees’
income taxes, as well as social security
contributions both by the company and
the employees. Thus, Suominen’s tax
footprint includes also the collected and
remitted employees’ income taxes as well
as social security contributions, but the
employer’s taxes are clearly separated
from the employees’ taxes and payments
in the report.
Suominen’s tax footprint arises
from the business operations in
the countries where it operates
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37Suominen Annual Report 2020
Suominen’s corporate income taxes
are significantly aected by tax losses
generated in the past in certain countries
where Suominen operates. Based on local
tax laws and regulations, tax losses are
normally carried forward and deducted
from the taxable profits generated in the
future. At the moment, Suominen’s taxable
result does not incur corporate income tax
payments in Finland, as it has tax losses
carried forward from past years. Suominen
is subject to group tax consolidation
methods in several countries based on
each country’s tax laws and regulations,
which eectively means that Suominen’s
local companies are taxed on the local
consolidated taxable income.
In 2020, Suominen utilized in the USA
the COVID-19 related tax reliefs which
allowed companies to carry back losses
to past years. This resulted in Suominen
receiving a federal corporate income tax
refund from prior years and decreased
the total federal corporate income taxes
for2020.
The group companies also pay property
and real estate taxes based on the land
and buildings they own, as well as dierent
fiscal payments levied, for example, on
manufacturing operations. Suominen does
not consider these as indirect taxes to be
collected and remitted, but as taxes that
are costs for the Group companies.
Suominen generated a positive
economic contribution to the
surrounding society
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38 Suominen Annual Report 2020
Taxes and similar payments borne
EUR thousand Finland Other countries Finland Other countries
Corporate income tax, tax on profit* - -, -,
Property taxes - - - -
Employer contributions and taxes -, -, -, -,
VAT as expense - - - -
Custom duties on export** - - - -
Custom duties on import** - -, - -,
Excise duties - - - -
Other taxes and similar payments - - - -
TOTAL -, -, -, -,
Taxes and similar payments collected and paid
EUR thousand Finland Other countries Finland Other countries
Net VAT , -, , -,
Payroll taxes and similar payments collected
and paid -, -, -, -,
Withholding taxes on various payments - - - -
TOTAL -, -,
* Corporate income taxes do not include any deferred taxes.
** Custom duties are borne by the company importing or exporting goods and not collected and/or paid by some other tax payer.
For these reasons custom duties are reported as taxes borne.
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39Suominen Annual Report 2020
REPORTING PRINCIPLES
Suominen publishes its sustainability report as part of
its Annual Report. The previous Sustainability Report,
covering 2019, was published in February 2020.
Suominen is reporting according to the Core option
of the Global Reporting Initiative (GRI) standards. This
means that our reporting includes all General Disclosures
required by the Core options and Sector Disclosures
relevant to Suominen.
A materiality assessment, including stakeholder
engagement, was conducted in 2019, serving as the basis
for decisions on material themes and disclosures. The
relative priority for material topics was determined as
an outcome of a stakeholder survey and management
workshop.
The reporting period for all presented data is one
calendar year (January 1–December 31, 2020) and the
enclosed historical data encompasses the last one, two or
three years, depending on the topic.
Economic responsibility
Figures related to economic responsibility are based on
Suominen’s consolidated financial statements, which are
prepared in accordance with the International Financial
Reporting Standards (IFRS), including International
Accounting Standards (IAS) and Interpretations issued
by the International Financial Reporting Interpretations
Committee (SIC and IFRIC). The consolidated financial
statements include the financial statements of Suominen
Corporation and its subsidiaries. The functional and
reporting currency of the parent company is the
euro, which is also the reporting currency used in
the consolidated financial statements. The functional
currencies of subsidiaries are determined by the primary
economic environment in which they operate.
People and safety
Information regarding the total number of personnel is
reported on the basis of our financial statements, with
more detailed human resources data being derived from
separately collected statistics. This data represents the
situation at the end of 2020. Incident data is collected
continuously, by using the group-wide accident reporting
system covering all Suominen employees. The calculation
principles and boundaries for each indicator are explained
in more detail in the GRI index.
Minimizing environmental impacts
Consolidated environmental and energy data covers
all our production units. Oces and other premises
with no production activities are excluded from this
data, due to the materiality principle. Consolidated
environmental data is collected on a monthly basis from
Suominen’s production units, based on invoices and
consumption information, while some information is
based on separately collected statistics. The Windsor
Locks plant in Connecticut, USA, is operated jointly
with Ahlstrom-Munksjö Oyj: only consumption data on
the environmental impacts of Suominen’s production
lines is taken into account in the environmental figures.
Suominen calculates its Scope 1 and 2 greenhouse gas
emissions according to the Greenhouse gas protocol.
Thecalculation principles and boundaries for each
indicator are explained in more detail in the GRI index.
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40 Suominen Annual Report 2020
GRI INDEX
GRI STANDARD LOCATION COMMENTS
OMISSIONS AND
REASONS FOR OMISSIONS
GRI 102: General disclosure
Organizational profile
102-1 Name of the
organization
See comments Suominen Corporation
102-2 Activities, brands,
products, and services
AR 3
102-3 Location of headquarters See comments Karvaamokuja 2 B, 00380 Helsinki,
Finland
102-4 Location of operations AR 3
102-5 Ownership and legal
form
See comments Suominen Corporation is a public
company and its shares are listed on
Nasdaq Helsinki.
102-6 Markets served AR 3, 12–13
102-7 Scale of the organization AR 3, 8, 10–11, 92
102-8 Information on
employees and other
workers
AR 3, 22–23, 40, 46,
See comments
The Windsor Locks plant in CT, USA is
co-operated with Ahlstrom-Munksjö
Oyj and there a significant amount of
work is performed by workers who are
not Suominen’s employees. Otherwise,
contractors are mainly used in dierent
maintenance and construction work,
which are typically seasonal in nature.
There is limited seasonal variation during
vacation periods at our plants.
102-9 Supply chain AR 9–11, 28
102-10 Significant changes to
the organization and its
supply chain
AR 4–6, 85
102-11 Precautionary Principle
or approach
See comments Suominen’s risk management process
enables the company to manage
risks in order to avoid any harm to the
environment and ensure the continuity of
its operations.
102-12 External initiatives AR 33–34
102-13 Membership of
associations
AR 46
Strategy
102-14 Statement from senior
decision-maker
AR 4–6
102-15 Key impacts, risks, and
opportunities
AR 4–6, 86–89
Ethics and integrity
102-16 Values, principles,
standards, and norms of
behavior
AR 14–16, Code of Conduct,
Supplier Code of Conduct
102-17 Mechanisms for advice
and concerns about
ethics
Code of Conduct
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41Suominen Annual Report 2020
GRI STANDARD LOCATION COMMENTS
OMISSIONS AND
REASONS FOR OMISSIONS
Governance structure
102-18 Governance structure AR 52
102-22 Composition of the
highest governance
body and its committees
AR 53–55
102-23 Chair of the highest
governance body
AR 54
102-35 Remuneration policies AR 62–70
102-36 Process for determining
remuneration
AR 62–70
Stakeholder engagement
102-40 List of stakeholder
groups
AR 36
102-41 Collective bargaining
agreements
AR 46
102-42 Identifying and selecting
stakeholders
AR 35–36
102-43 Approach to stakeholder
engagement
AR 35–36
102-44 Key topics and concerns
raised
AR 35–36
Reporting practice
102-45 Entities included in the
consolidated financial
statements
AR 112
102-46 Defining report content
and topic Boundaries
AR 18, 40
102-47 List of material topics AR 18
102-48 Restatements of
information
AR 40
102-49 Changes in reporting AR 40
102-50 Reporting period AR 40
102-51 Date of most recent
report
AR 40
102-52 Reporting cycle AR 40
102-53 Contact point for
questions regarding the
report
See comments Noora Rantanen, Manager,
Sustainability & Marketing
firstname.lastname@suominencorp.com
102-54 Claims of reporting in
accordance with the GRI
Standards
AR 40
102-55 GRI content index AR 41–45
102-56 External assurance See comments Suominen's sustainability report has not
been externally assured.
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42 Suominen Annual Report 2020
GRI STANDARD LOCATION COMMENTS
OMISSIONS AND
REASONS FOR OMISSIONS
GRI 103: Management approach
103-1 Explanation of the
material topic and its
Boundary
AR 18, 40
103-2 The management
approach and its
components
AR 50
103-3 Evaluation of the
management approach
AR 50
ECONOMIC STANDARDS
GRI 201: Economic performance
201-1 Direct economic
value generated and
distributed
AR 46
GRI 205: Anti-corruption
205-1 Operations assessed
for risks related to
corruption
AR 81
205-2 Communication and
training about anti-
corruption policies and
procedures
AR 34, 81
205-3 Confirmed incidents of
corruption and actions
taken
See comments No incidents in 2020 reported.
GRI 206: Anti-competitive behavior
206-1 Legal actions for anti-
competitive behavior,
anti-trust, and monopoly
practices
See comments No cases in 2020 reported.
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43Suominen Annual Report 2020
GRI STANDARD LOCATION COMMENTS
OMISSIONS AND
REASONS FOR OMISSIONS
ENVIRONMENTAL STANDARDS
GRI 302: Energy
302-1 Energy consumption
within the organization
AR 29, 47
302-4 Reduction of energy
consumption
AR 29, 47
GRI 303- Water
303-1 Interactions with water
as a shared resources
AR 29, 47
303-2 Management of water
discharge-related
impacts
AR 29, see comments Our water use and discharges are
regulated by the national or regional
authorities and we monitor the quality
and volume of discharged water
according to the requirements set by
authorities.
303-3 Water withdrawal by
source
AR 29, 47 Breakdown by fresh water and
other water as no other water is
used.
303-4 Water Discharge AR 29, 47 Breakdown by fresh water and
other water as no other water is
used.
303-5 Water Consumption AR 29, 47 Breakdown by fresh water and
other water as only fresh water is
used. Change in water storages is
not reported as it is not relevant for
our operations.
GRI 305: Emissions
305-1 Direct (Scope 1) GHG
emissions
AR 30, 48
305-2 Energy indirect (Scope 2)
GHG emissions
AR 30, 48
305-5 Reduction of GHG
emissions
AR 30, 48
GRI 306: Euents and waste
306-2 Waste by type and
disposal method
AR 30, 48 Breakdown of hazardous waste
is omitted as the amount of
hazardous waste accounts only
0.5% of the total amount of
generated waste, which is not
material amount.
306-3 Significant spills See comments No significant spills in 2020.
GRI 307: Environmental compliance
307-1 Non-compliance with
environmental laws and
regulations
See comments No significant fines in 2020.
GRI 308: Supplier environmental assessment
308-1 New suppliers that
were screened using
environmental criteria
AR 34, see comments 100% of the new suppliers were screened
using environmental criteria
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44 Suominen Annual Report 2020
GRI STANDARD LOCATION COMMENTS
OMISSIONS AND
REASONS FOR OMISSIONS
SOCIAL STANDARDS
GRI 401: Employment
401-1 New employee hires and
employee turnover
AR 49
GRI 403: Occupational health and safety
403-1 Occupational health
and safety management
system
AR 25–26, 40, 50
403-2 Hazard identification,
risk assessment, and
incident investigation
AR 25–26, 40, 50
403-3 Occupational health
services
AR 22–23, 25–26, 40, 50, see
comment
Not reported in detail.
403-4 Worker participation,
consultation, and
communication on
occupational health and
safety
AR 25–26, 40, 50
403-5 Worker training on
occupational health and
safety
AR 25–26, 40, 50
403-6 Promotion of worker
health
AR 21–24, 50
403-7 Prevention and
mitigation of
occupational health and
safety impacts directly
linked by business
relationships
AR 22–23, 25–26, 40, 50
403-9 Work-related injuries AR 25–26, 50, see comments Main types of injuries are cuts, bruising,
strains, burns, grazes and sprains.
GRI 404: Training and education
404-3 Percentage of
employees receiving
regular performance
and career development
reviews
AR 24, 49
GRI 405: Diversity and equal opportunity
405-1 Diversity of governance
bodies and employees
AR 49, 55
GRI 406: Non-discrimination
406-1 Incidents of
discrimination and
corrective actions taken
See comments No incidents in 2020 reported.
GRI 414: Supplier social assessment
414-1 New suppliers that were
screened using social
criteria
AR 34, see comments 100% of the new suppliers were screened
using social criteria.
GRI 418: Customer privacy
418-1 Substantiated complaints
concerning breaches of
customer privacy and
losses of customer data
See comments No incidents in 2020 reported.
GRI 419: Socioeconomic compliance
419-1 Non-compliance with
laws and regulations in
the social and economic
area
See comments No incidents in 2020 reported.
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45Suominen Annual Report 2020
GRI APPENDIX
GRI 102-8 Information on employees
and other workers
a. Total number of employees by employment contract
by gender
Women Men
Permanent
Temporary
b. Total number of employee by employment contract
by region
Europe Americas
Permanent
Temporary
c. Total number of employees by employment type
Women Men
Full-time
Part-time
GRI 102-13 Memberships in associations
Suominen’s key memberships by country. Suominen is also involved in
dierent professional networks and chambers of commerce.
Finland
EDANA
Finnish Business and Society (FiBS)
Finnish textile and fashion
USA
INDA Association of the Nonwoven Fabrics Industry
Brazil
ABINT Nonwovens Industry Brazilian Association
Spain
Agrupación Textil Alcoyana
Aitex, Asociación de investigación de la industria textile
Ateval, Asociación de Empresarios del Textil de la Comunidad
Valenciana
GRI 102-41 Collective bargaining agreements
Overall, 55% of Suominen employees are covered by collective
bargaining agreements. Participation in collective bargaining
agreements varies significantly between regions; South America 87%,
Europe 100% and North America 0%. This reflects common practice in
these regions.
GRI 201-1 Direct economic value generated
and distributed
Revenue, EUR million
Net sales .
Other operating income .
Revenues from financial investments .
Total revenue .
Operating costs, EUR million
Direct production expenses: materials and services -.
Indirect production expenses, R&D and SGA: services
and other expenses -.
Other operating expenses -.
Total operating costs -.
Employee wages, salaries and benefits, EUR million
Wages and salaries -.
Pensions -.
Other personnel expenses -.
Total employee wages, salaries and benefits -.
Payments to providers of capital, EUR million
Interest expenses -.
Other financial expenses -.
Total payments to providers of capital -.
Payments to government, EUR million
Current income tax charge for the year and previous
years -.
Other income taxes -.
Total payments to government -.
Retained in business, EUR million
.
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46 Suominen Annual Report 2020
Energy
GRI 302-1: Energy consumption within the organization
GRI 302-4: Reduction of energy consumption
Energy consumption, GJ
Non-renewable fuel consumed
Natural gas - a ,. ,. ,.
Other non-renewables - a ,. ,. ,.
Renewable fuel consumed - b
Purchased electricity - c ,. , . ,.
Purchased steam - c , . ,. , .
Total energy consumption - e ,,. ,,. ,,.
Change in total energy consumption - ,. -,. ,.
Energy sold outside organization is not reported as Suominen does not generate any energy to be sold outside the
organization.
Water
GRI 303-3: Water withdrawal
GRI 303-4: Water discharge
GRI 303-5: Water consumption
All areas Areas with water stress
Water withdrawal by source, ML
Surface water - a&b , , ,
Ground water - a&b , , ,
Seawater - a&b
Produced water - a&b
Third-party water - a&b
Total , , ,
Water discharge by type of destination, ML
All areas Areas with water stress
Surface water - a&c , ,
Ground water - a&c
Seawater - a&c
Third-party water - a&c
Total , ,
Water consumption - a&b
Figures presented here are based on the data collected from Suominen
sites. We started to report water discharge and water consumption in
2019 according to the GRI reporting standard and therefore no data
before 2019 is presented. World Resource Institute’s “Aqueduct Water
Risk Atlas” is used for defining areas with water stress. Areas with water
stress are defined as areas where the ratio of annual water withdrawal
to annual renewable water supply is high or extremely high. Our water
intake and discharge are regulated by national or regional authorities.
For certain chemicals threshold limits are set by the authorities
and the quality of discharged water is followed according to the
monitoringplan.
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47Suominen Annual Report 2020
Emissions
GRI 305-1 Direct (Scope 1) GHG emissions
GRI 305-2 Energy indirect (Scope 2) GHG emissions
GRI 305-5: Reduction of GHG emissions
Greenhouse gas emissions, tons of CO₂e
Direct (Scope 1) emissions - , , ,
Biogenic Direct (Scope 1) emissions -
Energy indirect (Scope 2) emissions – market based - , , ,
Energy indirect (Scope 2) emissions – location based - , , ,
Total emissions (Scope 1 and Scope 2 – market based) , , ,
Change of total emissions - , -, -,
GRI 306-2 Waste by type and disposal method
Waste by type and disposal method
Non-hazardous waste, tons
Energy recovery - b ,. ,. N/A
Landfill - b ,. ,. ,.
Hazardous waste, tons
Total amount of
hazardous waste - a . . N/A
Suominen’s direct (Scope 1) greenhouse gas (GHG) emissions are
from the sources owned by Suominen and they are expressed as
CO₂e, which covers greenhouse gases as described in Kyoto Protocol
(CO₂,CH₄, N₂O, HFCs, PCFs, SF₆ and NF₃). No biogenic emissions are
generated form our operations as only fossils fuels are used.
In 2019, we revised Scope 2 greenhouse gas emissions calculation
and also some updates were made to the greenhouse gas data.
Therefore figures presented regarding Scope 2 emissions are restated.
Scope 2 emissions are calculated according to the Greenhouse Gas
Only waste disposal methods relevant for Suominen are presented.
Protocol’s “A Corporate Accounting and Reporting Standard” and
covers emissions from purchased electricity and steam. Market-based
emissions are used for target setting and following our progress.
Greenhouse Gas Protocol’s calculation hierarchy and related emissions
factors are used for the calculation of marked- and location-based
methods. Market-based emissions are mainly derived from the local
suppliers or when appropriate residual mixes (RE-DISS project) are
used. Emissions factors used for local-based emissions are derived
from USA’s national statistics or eGRID database.
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48 Suominen Annual Report 2020
GRI 401-1: New employee hires and
employee turnover
Employee distribution and turnover
Europe Americas Total
Number of employees
By age group
Under 30
30–50
Over 50
By gender
Women
Men
Number of new hires
By age groups
Under 30
30–50
Over 50
By gender
Women
Men
Employee turnover
By age group
Under 30
30–50
Over 50
By gender
Women
Men
Total employee turnover rate % % %
GRI 404-3 Percentage of employees receiving
regular performance and career development
reviews
Percentage of employees receiving regular performance and
career development review
Men Women
White collar % %
Blue collar % %
GRI 405-1 Diversity of governance bodies and
employees
Diversity of Executive Team
By age group Men Women
Under 30
30–50
Over 50
This is Suominen | Sustainability | Corporate Governance | Financial Information
49Suominen Annual Report 2020
Our management approach
PEOPLE AND SAFETY
LOW IMPACT
MANUFACTURING
SUSTAINABLE
NONWOVENS CORPORATE CITIZENSHIP
Description and
purpose of the
management
method
Our work is guided by our Code of Conduct and our values: ownership, teamwork, performance, integrity. The purpose of
the management method is to ensure the implementation of the strategy and the achievement of the targets as planned.
Policies and
commitments
- Suominen HR principles
and regional policies
- Code of Conduct
- Compensation and
benefits policy
- Blind hiring when possible
- Safety principles and
Behavior Based Safety
program
- Privacy policy
- ISO 45001
(in 2 out of 8plants)
- ISO 14001 certification
(in 7 out of 8 plants)
- ISO 9001 (in all plants)
- ISO 50001
(in 2 out of 8 plant)
- Local environmental
Policies
- Code of Conduct
- Supplier Code of Conduct
- Suominen oers
traceability certifications
for FSC
®
, PEFC & SFI,
as well as skin-safe
certifications like
OEKO-TEX
- Code of Conduct
- Supplier Code of Conduct
- Anti-corruption policy
- Treasury policy
- Risk management policy
- Tax policy
- Credit policy
- Related party policy
- Competition law
compliance policy
- Insider policy
- Business agreement policy
- Disclosure policy
Objectives - We invest in increasing
employee engagement
- We continue to build a
high performance culture
- We continue to strengthen
our safety culture
- We continuously strive to
decrease environmental
impacts of our operations
- We are the frontrunner in
sustainable nonwovens
- We promote responsible
business practices in our
operations and supply
chain
- We communicate openly
and transparently about
our operations
Resources and
responsibilities
Leading functions:
HR and HSEQ
Leading functions:
Operations and HSEQ
Shared responsibility for
several functions
(e.g. Business Development,
Sourcing, R&D and
Operations)
Leading functions:
Legal, Sourcing and Finance
The leading functions of each theme are responsible for implementation, monitoring, management and evaluation of
progress towards the goals set for each area. The Communications, IR and Sustainability function coordinates the work
and supports other functions when needed.
Grievance
mechanism
Suspected misconduct can be reported e.g. to the supervisor, the supervisor’s supervisor, local or corporate HR function,
or through the whistle-blowing channel. Suominen does not accept any retaliation against anyone who reports a
suspected violation of the Code of Conduct or other policies in good faith. Further, no retaliation will be tolerated against
anyone who participates or assists in the investigation of a report by Suominen.
Evaluation
of the
management
method
Compliance, internal
control and audits, incident
reports, assessment
of occupational safety
risks, performance and
development discussions,
employee engagement
surveys, one-to-one
discussions, incident reports
submitted by employees,
employee exit surveys
Compliance, external audits
including ISO 9001:2015
and ISO 14001:2015 audits,
incident reports and
monitoring and evaluating
our KPIs
Compliance, audits by
customers, monitoring and
evaluating our KPIs, audits
of our supply chain
Compliance and evaluation
of the eciency of our
policies
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50 Suominen Annual Report 2020
Suominen Corporation (“Suominen” or the “Company”)
complies with the Finnish Corporate Governance
Code 2020 (the “Code”) issued by the Securities Market
Association. The Code is available on the internet at
www.cgfinland.fi.
This Corporate Governance Statement (the “Statement”)
is published separately from the report of Board of Directors.
This Statement has been published simultaneously with
the Financial Statements and Report by the Board of
Directors as a Stock Exchange Release, and it is available
also on Suominen’s website, www.suominen.fi.
The Audit Committee and the Board of Directors of
Suominen Corporation have reviewed the Statement.
CORPORATE GOVERNANCE
STATEMENT OF SUOMINEN
CORPORATION FOR 2020
The Statement will not be updated during the financial
year, but up-to-date information on its various topics is
available on Suominen’s website.
1. Suominen’s governing bodies
Responsibility for the Company’s operations is held by the
constitutional bodies required by the applicable laws and
regulations. Suominen’s decision-making bodies are the
General Meeting of Shareholders, the Board of Directors
with its two Committees, and the President & CEO,
supported by the Executive Team.
Auditor
Audit
Committee
Personnel &
Remuneration
Committee
General Meeting
President & CEO
Executive Team
Board of Directors
Shareholders’
Nomination Board
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52 Suominen Annual Report 2020
General Meeting of Shareholders
Suominen’s supreme decision-making body is the General
Meeting of Shareholders, where shareholders exercise
their decision-making power. The Annual General
Meeting is held once per year before the end of April on a
date determined by the Board of Directors. It decides on
the matters stipulated in the Finnish Companies Act and
Suominen’s Articles of Association. Such matters include:
- Adoption of the financial statements
- Use of the profit shown on the balance sheet
- Election of the Chair and members of the Board of
Directors and the decision on their remuneration
- Discharging the members of the Board of Directors and
the President & CEO from liability, and
- Election of the Auditor and the decision on the Auditor’s
compensation.
Suominen publishes a notice of the Annual General
Meeting of Shareholders on the Company’s website no
earlier than two months and no later than three weeks
prior to the meeting, however, at least nine (9) days prior
to the record date of the meeting. In order to participate
in the Annual General Meeting, a shareholder must inform
the Company of the participation at the latest on the date
mentioned in the invitation. The date may not be earlier
than ten (10) days before the meeting.
Annual General Meeting in 2020
The Annual General Meeting was held in Helsinki on
March 19, 2020. Due to the COVID-19 pandemic, the
meeting was held in the shortest and simplest possible
form. A total of 18 shareholders representing a total of
36,464,271 shares and votes were present at the meeting
– six of them in person and others being represented
through a proxy. One Board member and the Auditor
of the Company were present at the meeting. The
Annual General Meeting documents are available on the
Company’s website www.suominen.fi.
Shareholder’s Nomination Board
Suominen has a permanent Shareholders’ Nomination
Board established by the 2013 Annual General Meeting.
The task of the Nomination Board is to prepare and
present to the Annual General Meeting and, if necessary,
to an Extraordinary General Meeting, a proposal on the
remuneration of the members of the Board of Directors,
a proposal on the number of members of the Board of
Directors and a proposal on the members and the Chair
of the Board of Directors. In addition, the task of the
Nomination Board is to seek potential successors for the
board members.
The Nomination Board consists of four (4) members,
three of which are appointed by the Company’s three
largest shareholders who appoint one member each. The
largest shareholders shall be determined on the basis of
the registered holdings in the Company’s shareholders’
register held by Euroclear Finland Ltd as of the first
working day in September. The Chair of the Company’s
Board of Directors serves as the fourth member. The
Nomination Board is established to exist and serve until
the General Meeting of the Company decides otherwise.
The members are nominated annually, and their term of
oce ends when new members are nominated to replace
them. The members of the Nomination Board shall be
independent of the Company, and a person belonging
to the Company’s operative management cannot be a
member of the NominationBoard.
Nomination Board in 2020
Shareholders’ representatives on the Nomination Board
in 2020 were Lasse Heinonen, representing Ahlstrom
Capital B.V. (formerly AC Invest Two B.V.), Erik Malmberg
representing Oy Etra Invest Ab and Hanna Kaskela
representing Varma Mutual Pension Insurance Company.
Jan Johansson, Chair of the Board of Directors acted
as the fourth member of the Nomination Board. Lasse
Heinonen acted as the Chair of the Nomination Board.
In 2020, the Nomination Board convened three times.
The attendance rate at the meetings was 100%.
Board of Directors
The main duty of the Board of Directors of Suominen
is to direct Suominen’s strategy in a way that it, in the
long run, enables the delivery of the financial targets set
for Suominen and maximizes shareholder value while
simultaneously taking into account the expectations of
the key stakeholders.
The Board of Directors is responsible for the
administration and the proper organization of Suominen’s
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53Suominen Annual Report 2020
operations. The Board is responsible for making decisions
on matters that are likely to have a major impact on the
Company. The Board convenes according to an annual
meeting plan.
The members of the Board of Directors are elected by
the General Meeting of Shareholders. Pursuant to the
Articles of Association of the Company, the Board shall
have at least three and no more than seven members.
The main duties
The duties of the Board are defined in the Finnish laws
and regulations, Suominen’s Articles of Association, the
Finnish Corporate Governance Code and the Board’s
Charter. The main duties are the following:
- to approve the Company’s strategy and oversee its
implementation
- to approve the Company’s long-term targets and
monitor their implementation
- to approve the annual business plan
- to approve major business acquisitions, divestments,
investments or expenditures
- to approve major external funding (both debt and
equity), capitalization of subsidiaries, and guarantees
and mortgages
- to decide on the appointment and dismissal of the
CEO and other members of the Executive Team and to
decide on their terms of employment and remuneration
- to approve the Company’s organizational structure
- to monitor and supervise the Company’s performance
and to ensure the eectiveness of its management
- to decide on the Company’s share-based long term
incentive schemes
- to approve the Company’s financial reports, including
annual accounts, interim reports, report by the Board of
Directors and financial statement releases
- to ensure that the Company has adequate planning,
information and control systems and resources for
monitoring results and managing risks
- to convene General Meetings
- to establish a dividend policy and make a proposal on
distribution of dividend
- to make a proposal concerning the election of the
auditor and the auditing fees, and
- to make other proposals to General Meetings.
Board of Directors in 2020
The 2020 Annual General Meeting elected six members to
Suominen’s Board of Directors. The term of oce of the
members of the Board of Directors ends at the close of
the Annual General Meeting 2021.
Board member Member since Born Nationality Education Main occupation Share ownership
Jan Johansson 2017, Chair since
2017
1954 Swedish LL.M. Board Professional ,
Andreas Ahlström 2015 1976 Finnish M.Sc. (Econ. and
Business Adm.)
Investment Director,
Ahlström Capital Oy
,
Björn Borgman 2020 1975 Swedish M.Sc. (Industrial
Engineering)
CEO, HL Display AB ,
Nina Linander 2020 1959 Swedish B.Sc. (Econ.), MBA Board Professional ,
Sari Pajari-
Sederholm
2019 1968 Finnish M.Sc. (Tech.) SVP, Sales and
Marketing, Metsä Board
Corporation
,
Laura Raitio 2015 1962 Finnish Licentiate of
Technology
Board Professional ,
Until March 19, 2020
Risto Anttonen 2011 1949 Finnish B.Sc. (Econ) Board Professional
Hannu Kasurinen 2012 1963 Finnish M.Sc. (Econ.) EVP, Packaging
Materials Division,
Stora Enso Oyj
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54 Suominen Annual Report 2020
Independence of the Board members
The Board of Directors has evaluated the independence
of its members. All members are independent of the
Company. All members are also independent of its
significant shareholders, with the exception of Andreas
Ahlström, who acts as Investment Director at Ahlström
Capital Oy. The largest shareholder of Suominen, Ahlstrom
Capital B.V., is a group Company of Ahlström Capital.
Meeting practice
The Board of Directors convenes under the direction of
the Chair or, if the Chair is unable to attend, the Deputy
Chair. Principally, the matters are presented by the
President & CEO.
In 2020, the Board of Directors convened 11 times, of
which three times per capsulam. The attendance rate
at the meetings was 100%. The participation of each
individual member is presented in the table below.
Name Participation
Jan Johansson Chair /
Andreas Ahlström Deputy Chair /
Björn Borgman Member /
Nina Linander Member /
Sari Pajari-Sederholm Member /
Laura Raitio Member /
Until March 19, 2020
Risto Anttonen Deputy Chair /
Hannu Kasurinen Member /
Self-evaluation
In 2020, after most of its meetings, the Board assessed the
preparations of the meeting, the course of the meeting,
and its own operations, in line with the principle of
continuous development.
The Board of Directors conducted an annual evaluation
of its operation and working methods during financial
year 2020. The assessment was conducted internally. The
results of the assessment were discussed confidentially
also with the Nomination Board members to whom the
report was provided.
Diversity principles of the Board of Directors
At Suominen, diversity has been recognized as an
essential success factor in the long term. When
considering the Board’s composition, diversity is assessed
through a number of viewpoints. Diversity in the Board’s
competencies, experience and opinions promotes
openness to new ideas and helps the Board support and
challenge the Company’s management. Furthermore,
diversity promotes open discussion, integrity in decision
making, good corporate governance, and eective
supervision of both the Board and the management, and
it also supports succession planning.
The Nomination Board of Suominen’s shareholders
evaluates the number of members on the Board, its
composition and the competence requirements of the
Board in the light of the present and future needs of the
Company. When assessing the composition of the Board,
the Nomination Board considers, among other things,
whether the Board possesses a broad range of business
knowledge and members representing both genders and
various ages. It is Suominen’s objective to have both men
and women on its Board.
It is fundamental that the Nomination Board’s final
proposal to the Annual General Meeting is based on the
qualifications and competencies of each candidate. In
addition, candidates must also have the possibility to
devote a sucient amount of time to the Board work.
Table 1
Males 50%
3
Females 50%
3
Gender
Males 50%
Females 50%
5
41–50 years 33%
2
51–60 years 33%
2
61–70 years 33%
2
Age
41–50 years 33%
51–60 years 33%
61–70 years 33%
6
Less than 1 year 33%
2
1–4 years 33%
2
4–8 years 33%
2
Tenure
Less than 1 year 33%
1–4 years 33%
4–8 years 33%
7
Board Diversity
(December 31, 2020)
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55Suominen Annual Report 2020
The essentials of the diversity principles are described
in this Statement. They can be reviewed in their entirety at
www.suominen.fi.
Board committees
The Board of Directors has two permanent committees:
the Audit Committee and the Personnel and Remuneration
Committee. The Board of Directors elects the members
of the committees among its members at its annual
organizing meeting. Both Committees report to the Board
on their activities after each Committee meeting.
Audit Committee
The Audit Committee assists the Board in supervising
the Company’s governance, accounting and financial
reporting, internal control systems and monitoring the
activities of the external audit. The Audit Committee
prepares for the Board matters that fall under its areas of
responsibility, but it does not have autonomous decision-
making powers unless the Board resolves otherwise on
certain matters.
The Chair and members of the Audit Committee
are elected annually by the Board from among its
members. The Audit Committee comprises at least three
members. The members of the Audit Committee must be
independent of the Company, and at least one member
must also be independent of the Company’s significant
shareholders.
Audit Committee in 2020
The Audit Committee consisted of Nina Linander (Chair
as of March 19, 2020), Hannu Kasurinen (Chair until March
19, 2020), Andreas Ahlström and Laura Raitio.
In 2020, the Audit Committee convened 4 times.
The attendance rate at the meetings was 100%. The
participation of each individual member is presented in
the table below.
Name Participation
Nina Linander Chair /
Andreas Ahlström Member /
Laura Raitio Member /
Until March 19, 2020
Hannu Kasurinen Chair /
Personnel and Remuneration Committee
The Personnel and Remuneration Committee assists
the Board by preparing remuneration and appointment
matters concerning the company’s CEO and other
members of the Executive Team. The Committee
prepares for the Board matters that fall under its areas of
responsibility, but it does not have independent decision-
making powers unless the Board resolves otherwise on
individual matters.
The Chair and members of the Committee are elected
annually by the Board from among its members. The
Committee comprises at least three members. The
members of the Committee must be independent of the
Company.
Personnel and Remuneration Committee in 2020
The Personnel and Remuneration Committee consisted
of Jan Johansson (Chair), Björn Borgman and Sari Pajari-
Sederholm.
In 2020, the Personnel and Remuneration Committee
convened twice. The attendance rate at the meetings
was 100%. The participation of each individual member is
presented in the table below.
Name Participation
Jan Johansson Chair /
Björn Borgman Member /
Sari Pajari-Sederholm Member /
President & CEO
The President & CEO (Managing Director) of Suominen is
appointed by the Board of Directors. The President & CEO
is responsible for day-to-day operations in accordance
with the Companies Act and guidelines and instructions
provided by the Board of Directors. The President & CEO
is in charge of the day-to-day management of Suominen
Group and is responsible for ensuring that the Company’s
accounting practices comply with the law and that its
assets are reliably managed pursuant to the Companies
Act. The President & CEO acts as the Chair of the
Executive Team as the immediate supervisor of the team’s
members.
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56 Suominen Annual Report 2020
Petri Helsky, born 1966, serves as the President & CEO
of Suominen. Mr. Helsky holds Master of Science degrees
both in Engineering and Economics.
Executive Team
member
Team member
since Born Nationality Education Position Share ownership
Petri Helsky 2019 1966 Finnish M.Sc. (Tech.),
M.Sc. (Econ.)
President & CEO ,
Toni Tamminen 2019 1978 Finnish D.Sc. (Tech.),
M.Sc. (Econ.)
CFO ,
Lynda Kelly 2014 1964 US B.Sc. SVP, Business
Development and
as of April 6, interim
SVP, Americas
,
Markku Koivisto 2017 1971 Finnish M.Sc. (Tech.) SVP, Europe & R&D ,
Klaus Korhonen 2019 1974 Finnish LL.M. SVP, HR & Legal ,
Mimoun Saïm 2011 1964 French ENSI Engineering SVP, Operations ,
Ernesto Levy acted as SVP, Americas until April 6, 2020.
Executive Team
The President & CEO is supported by the Executive Team.
In 2020, the Executive Team consisted of:
Suominen’s operative organization
Suominen’s operative organization consists of two
business areas, Europe and Americas, and seven global
functions supporting the business: Operations, Finance,
Sourcing, R&D, HR & Legal, Business Development and
Communications & IR. The Company only has one
operating segment.
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57Suominen Annual Report 2020
2. Descriptions of internal control
procedures and the main features
of risk management systems
Internal control
Control environment
Control operations are embedded in the activities of
Suominen’s organization. Controlling is executed in
connection with the steering of business processes,
supported by comprehensive reporting.
Suominen’s control environment is based on
instructions, the business culture and the way of working
adopted by the Company’s managers and employees.
In cascading the principles in the organization, honesty,
transparency and working in teams are integral elements
of establishing high ethical standards throughout the
Company.
The foundation of the internal control process is based
on the Company’s Code of Conduct, values, policies
and other directives and instructions. The responsibility
structure of the Company is based on authority inherent
in the positions and work descriptions, segregation of
duties and the “four-eyes” and “one-over” decision-
making principles. Eective internal control requires that
duties are properly allocated to employees and potential
conflicts of interests are identified and eliminated. A
satisfactory control environment is ensured through
internal analyses and evaluations of key processes.
Nominated Process Owners are responsible for ensuring
than ecient internal process controls are defined and
implemented across the organization.
The ICT function ensures that the security checks of
ICT systems throughout the Group are functioning and
conducted at a sucient level.
Control activities
Internal control activities are in place to, among other
things, verify that the Company’s financial reports provide
a true and fair view of the Company’s financial position.
It is the duty of the Board of Directors and the President
& CEO to organize the internal control activities. Each
member of the Board of Directors receives a monthly
report on the Company’s result and financial position.
In practice, control activities are conducted in the
meetings of the Board of Directors and the management
teams, where the results of the activities are reviewed.
The Company’s Finance function and the Group’s
controller network support and coordinate the financial
management and control of the activities of the entire
Group.
Internal control at Suominen has been decentralized
across global functions, who monitor compliance with the
operating guidelines approved by the Board concerning
their areas of responsibility. In addition to the Group-level
guidance, control measures are also taken at the business
area and plant level. Control measures include both
general and more detailed control procedures aimed at
preventing, revealing and correcting errors and deviations.
In day-to-day business operations, several control
activities are exercised to prevent potential errors and
deviations in financial reporting. Moreover, control
activities are in place to help reveal and correct the
identified errors. Suominen categorizes its control
activities into three categories. Documented instructions
help the organization to standardize the monitoring
of tasks. Continuous and regular reporting conveying
feedback on the performance of global functions and
each Group company ensures that instructions and
defined processes are followed. In critical processes,
specific authorizations are needed in the work flow, either
for security or for verification needs.
The need for separate evaluations, as well as their
scope and frequency, is defined by assessing risks and
the eectiveness of ongoing monitoring procedures.
Information security and related control activities play
a key role when the features of ICT systems are being
defined and applied.
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58 Suominen Annual Report 2020
Information and communication
The Company’s Financial Manual, policies approved by
the Board and other directives and instructions relating
to financial reporting are updated and communicated
on a regular basis by the management to all aected
employees and are also available in the Company’s
intranet. In addition, a standard reporting package is
used by the business areas and the subsidiaries. Group
management and business area management conduct
monthly reviews that include an analysis of performance
metrics and indicators assisting management to better
understand the underlying business performance.
Follow-up
Ongoing responsibility for follow-up rests with the
business area management and controller functions.
Regular inspections by quality auditors or customer
audit personnel cover also the internal controls of supply
chain processes.
The Company’s Finance function monitors the
operations and processes of the subsidiaries and the
accuracy of external and internal financial reporting.
Risk management
Risk management is considered an integral part of running
the business of Suominen, and the identification and
assessment of risks is an essential element of internal
control. The aim is to focus on the material risks that
are significant from a business perspective. Risks are
categorized into strategic, operational, financial and
hazard risks.
Operational risks are considered to potentially have
a material value in transactions with external parties.
However, the Company’s policies, instructions, process
check-ups, allocation of tasks and standards set up by
total quality operating systems help to establish a prudent
environment in which exposure to material risks can be
mitigated.
Risks relating to financial reporting are evaluated
and monitored by the Board, aiming to ensure that
the financial reporting of the Company is reliable,
supports decision-making and serves the needs of
external stakeholders. The valuation of assets, liabilities
and contingent liabilities based on various evaluation
assumptions and criteria may constitute a risk.
Future estimates and assumptions on the reporting date
involving a significant risk of causing material changes
in the carrying amounts of assets and liabilities are
continuously evaluated. Complex and evolving factors
having an impact on business circumstances may add
uncertainty to the assessment of the carrying amounts of
assets. To avoid errors in stating the fair values of assets or
liabilities, regular check-ups are made, e.g. by comparing
material flows, values, and quantitative and qualitative
data with the information in accounting. The risk of errors
due to irregularities and discontinuities in information is
reduced by using established and automated system-
based audit trails.
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59Suominen Annual Report 2020
3. Other information
Internal audit
Suominen does not have a separate internal audit
organization. The Company’s auditor presents annually
the external audit plan to the Audit Committee.
The Audit Committee considers annually whether there
is a need to perform extended audit procedures. If the
Audit Committee finds it necessary, it agrees separately
with the Company’s auditor or other suitable parties on
extended audit procedures. Findings related to extended
audit procedures are reported to the Audit Committee,
the President & CEO and the relevant management.
Insider management
Suominen complies with the EU Market Abuse Regulation
(“MAR”), the Finnish Securities Markets Act, the decisions,
regulations, guidelines and standards issued by the Finnish
Ministry of Finance and the Financial Supervisory Authority,
the rules of Nasdaq Helsinki Ltd as well as the Guidelines
for Insiders issued by Helsinki Exchange in force at any
given time. In addition, the Board of Directors of the
Company has approved an Insider Policy to inform the
governing bodies and employees of Suominen and its
aliated companies of the regulations in force pertaining
to insider trading.
Directors required to submit notifications
Based on the MAR, Suominen no longer maintains a
public insider register. Instead, Suominen maintains
a list of the Company’s directors and persons closely
associated with them. Persons on that list have an
obligation to notify Suominen and the Finnish Financial
Supervisory Authority of all transactions made with
Suominen’s financial instruments by them or on behalf
of them. Suominen will disclose the notifications it has
received as stock exchange releases as soon as possible.
At Suominen Corporation, the members of the Board
of Directors, the President & CEO and other members of
the Executive Team have been defined as subject to the
requirement to report their transactions.
Disclosed stock exchange releases on the transaction
notifications of directors and persons closely associated
with them can be viewed at www.suominen.fi
(> Investors > Share and shareholdings > Management
transactions).
Closed period
Suominen’s defined directors are subject to comply with
the so-called closed period. The closed period applies
prior to the disclosure of financial reports and lasts
30 calendar days, including the date of disclosure of a
financial report. During the closed period, Suominen’s
defined directors may not trade with the share or another
financial instrument of the Company. Core persons
preparing financial reports, among others, are also subject
to a similar 30-day closed period. The times of the closed
periods are disclosed through a stock exchange release
and in the event calendar available on the Company’s
website.
During a closed period, trading with Suominen’s
financial instruments by defined directors and core
persons is possible only in certain very exceptional
situations. An example of such an exceptional situation
is a transaction conducted by a director or core person
to participate in a share-saving scheme for Suominen
employees which is a prerequisite of a director’s or a core
person’s position. Any exceptions to the 30-day-long
closed period requires the Company’s approval of the
transaction in question. The exception cannot be applied
if a director or a core person has inside information.
Trading by directors and core persons
Directors and core persons must, in addition to abiding
by the closed period and other trade restrictions, time
their trading so that it does not weaken the general trust
in the securities market. Suominen recommends that
directors and core persons make long-term investments
in the Company’s shares and other financial instruments.
Further, it is also recommendable to time the trading
to a point in time when the market has as complete
knowledge of the factors aecting the value of the share
or the financial instrument as possible.
Monitoring and control
The Insider Ocer of Suominen is the Company’s
Chief Financial Ocer. The Insider Ocer is generally
responsible for the administration of the Company’s
insider matters.
Without limiting the obligations arising from MAR, the
Securities Markets Act or other applicable regulations, the
Company’s insider administration assumes responsibility
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60 Suominen Annual Report 2020
for internal communications concerning insider issues,
training in insider issues within the Company, preparing
and maintaining lists of directors and their closely
associated persons, receiving notifications concerning
the transactions of directors and their closely associated
persons, going through the notifications and forwarding
them to the Financial Supervisory Authority (if the
director/closely associated person has authorized the
Company to do so) and publishing the related stock
exchange release, preparing and maintaining project-
specific insider lists, preparing lists of personnel who are
defined as core persons, monitoring insider issues, and
administering the information to be published on the
internet, if needed.
Auditing
The Annual General Meeting held on March 19, 2020 re-
elected Ernst & Young Oy, Authorized Public Accountant
firm, as auditor of the Company. Ernst & Young Oy
appointed Toni Halonen, Authorized Public Accountant,
as the principally responsible auditor of the Company.
The auditors and the Audit Committee of Suominen agree
annually on an audit plan.
Audit fees in 2020
Auditor's fees and services
EUR
thousand
Auditing
Non-audit related fees (tax and other consulting fees)
Total
Principles for related party transactions
The Company complies with legislation regarding
related party transactions and ensures, in accordance
with the legislation and the Finnish Corporate
Governance Code, that the requirements set for
the monitoring, assessment, decision-making and
reporting of related party transactions are complied
with. The Board of Directors has approved Suominen’s
Related Party Policy defining the principles for
monitoring and assessing related party transactions.
Suominen has defined the parties that are related
to the Company and Suominen’s Finance function
maintains a list of such persons and entities. The
Company can carry out transactions with its related
parties provided that such transactions are made
within the Company’s ordinary course of business
and on customary, arm’s-length terms. The Board of
Directors decides on related party transactions that are
made either outside the Company’s ordinary course
of business or on other than customary, arm’s-length
terms.
Related party transactions are monitored regularly
by the Company’s Finance function as part of
the Company’s normal reporting and monitoring
procedures. Members of the Board of Directors
and the Executive Team are also obligated to report
any planned related party transactions or ones they
have become aware of to the CFO without undue
delay once the transaction has been brought to their
attention.
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61Suominen Annual Report 2020
REMUNERATION REPORT
OF SUOMINEN CORPORATION
REMUNERATION POLICY FOR GOVERNING BODIES OF SUOMINEN CORPORATION AT A GLANCE
According to the Remuneration Policy (the “Remuneration Policy” or “Policy”) for Governing Bodies of Suominen Corporation (“Suominen”
or the “Company”) approved by the Annual General Meeting (the “AGM”) on March 19, 2020, Suominen’s aim is to oer a framework for
remuneration that incentivizes to pursue towards the Company’s long-term financial performance and shareholder value creation.
The Policy has the following guiding principles:
1. Total remuneration opportunity shall be competitive enough in relation to the market
2. Performance-based incentives form a significant part of the President & CEO’s total target remuneration in order to emphasize a strong
pay-for-performance alignment
3. Majority of the performance-based incentives emphasize long-term, rather than short-term performance and have a straight link to
shareholder value
4. Share ownership requirement is set for the President & CEO in order to ensure balanced risk taking
The General Meeting determines the remuneration of the Board of Directors (the “Board”). The Shareholders’ Nomination Board prepares the
proposal for the General Meeting.
The President & CEO’s (the “CEO”) remuneration consists of a fixed base salary (including fringe benefits) and variable incentives. Variable
incentives can be short-term, such as cash bonuses, or long-term, such as share-based incentive plans. Share-based incentive plans can be
used for rewarding for performance and/or for retention purposes. The aim of the Board is that variable remuneration shall form a significant
portion of the annual remuneration opportunity at the target level granted to the CEO. On average, variable incentives shall at target level be
equal to the CEO’s fixed annual salary. If performance exceeds the Board’s expectations, the variable incentives shall exceed the fixed annual
salary.
The Board may deviate from the Policy in certain exceptional situations.
To read the full Policy, please visit our website: www.suominen.fi/en/investors/corporate-governance/remuneration
2020 REMUNERATION AT A GLANCE
Level of the Board’s remuneration has remained rather stable during the past years with occasional increases to annual and meeting fees.
In 2020, as per the decision of the AGM, the annual fees were increased and a fee for telephone conference meetings was introduced. In
addition, the payment frequency was changed so that all meeting fees related to 2020 were actually paid during the year. Therefore, total
Board remuneration paid in 2020 includes some meeting fees from 2019 and all 2020 fees. These changes combined are visible as increased
total remuneration for the Board in 2020.
Our current President & CEO started in Suominen in January 2019 and therefore did not receive any variable pay in 2019. The total pay for
the CEO increased from 2019 to 2020 due to receiving a performance based annual bonus payment during 2020. Additionally, the CEO was
awarded the first instalment of the Matching Restricted Share Plan, which was paid out in autumn 2020 and increased the value of his total pay.
The year 2020 was record high for Suominen in terms of financial results. This is also visible in the earned variable remuneration of the CEO
and other Suominen employees as well.
Our strategic ambition of profitable growth was very well achieved during 2020 and shareholder value creation (measured as Total
Shareholder Return, TSR) was excellent. For the CEO, this resulted in maximum pay-out (to be paid in 2021) under the Global Short-Term
Incentive (the “STI”) Plan and also to a share-based reward under the Long-Term Incentive (the “LTI”) Plan’s Performance Period 2018–2020
(pay-out being between the threshold and target level and to be paid in 2021).
1. Introduction
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62 Suominen Annual Report 2020
Dear Shareholders,
As the Chair of the Personnel and Remuneration
Committee (the “PRC”), I am pleased to present
Suominen’s Remuneration Report for the financial year
2020. The report has been approved by the Board of
Directors on February 3, 2021.
The Remuneration Report describes the remuneration
for our Governing Bodies as required by the Finnish
Securities Market Act, the Finnish Limited Liability
Companies Act and the Finnish Corporate Governance
Code 2020 (the “Governance Code”) issued by the
Securities Markets Association. The report presents
information on the remuneration of the CEO and the
Board during the financial year 2020. It also presents the
development of average employee remuneration and
company performance over the past five financial years in
comparison to the CEO and Board remuneration.
For further information on the Company, Board and
executive remuneration, to review the Remuneration
Policy that was approved at the 2020 AGM, and to
see other remuneration related information, including
summaries of the Executive Team remuneration
and incentive plans, please visit our website:
www.suominen.fi/en/investors/corporate-governance/
remuneration.
The PRC prepares matters relating to the appointment,
dismissal, remuneration, pension, benefits and other
material terms of employment of the CEO and other
members of the Executive Team, as well as matters
relating to the Company’s share based incentive plans.
The PRC prepares for the Board matters that fall under its
areas of responsibility, but it does not have independent
decision-making powers unless the Board resolves
otherwise on individual matters. Despite the COVID-19
pandemic, the PRC has been able to manage its activities
in a normal manner utilizing telephone conference
meetings.
The CEO started in January 2019 and we made good
progress in many important areas during 2019. The overall
company performance in 2019 was good which is also
visible in the CEO’s remuneration paid in 2020. Total pay
for the CEO increased from 2019 to 2020 due to receiving
variable pay from the annual Global STI and from the
Matching Restricted Share Plan.
Our financial results were record high in 2020. Our
employees have done a fantastic job in working towards
our strategic priorities and targets. The year 2020 was
characterized by the COVID-19 pandemic, which has
caused major challenges for the society as a whole. Our
primary focus at Suominen has been, and continues to be,
to safeguard the health and safety of our employees while
keeping our operations running. Thanks to our proactive
approach, the exceptional situation had only a limited
impact on our ability to serve our customers and to run
our operations. The COVID-19 pandemic increased sales
volumes in all our markets. Record high 2020 financial
result is also visible in our people’s remuneration from
variable incentive plans (to be paid in 2021). The CEO
achieved maximum earnings from the Global STI Plan
2020, from which the reward will be paid in spring 2021.
The Performance Period of the LTI Plan launched in
2018 came to an end at the end of 2020. The potential
reward from the Performance Period 2018–2020 was
based on the Relative Total Shareholder Return (TSR) and
Earnings before Interest and Taxes margin (EBIT%). The
Company’s financial performance especially in 2018 was
weak, improved in 2019 and achieved record high levels
in 2020, and consequently some shares will be awarded
to the participants, including the CEO, as a reward in
spring2021.
During 2020, we have complied with and executed
the Remuneration Policy as approved by the 2020 AGM.
There was no need to temporarily deviate from the Policy.
This is the first Remuneration Report for Suominen
as required by the new Governance Code. We will
continue to welcome shareholder feedback regarding our
remuneration and reporting.
Jan Johansson
Chair of the Board and the Personnel and Remuneration
Committee
1.1 Letter from the Chair of the Personnel and Remuneration Committee
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63Suominen Annual Report 2020
This section presents a comparison between the
remuneration of the CEO and the Board, the average
employee remuneration and the Company performance
for the financial years 2016 to 2020. During 2016–2020 our
financial performance has fluctuated but we have had a
strong upwards trend in 2019 and 2020.
Our current CEO started in his position in January 2019
after which the Company’s new strategy was defined
and launched in early 2020. The implementation of our
strategy is progressing well, and the benefits of that new
strategy are starting to be visible. Financially the year
2020 was a record year for Suominen as we achieved the
highest ever net sales and operating profit. Sales volumes
increased by the pandemic-driven high demand for
wipes, while sales prices decreased following lower raw
material prices. Our operating profit improved significantly
thanks to higher production and sales volumes, favorable
raw material prices, and improved production and raw
material eciency.
The current CEO, when joining in 2019, was invited to
participate to the LTI Performance Period of 2018–2020
and a separate Matching Restricted Share Plan. The
potential reward from the Performance Period 2018–2020
was based on the Relative Total Shareholder Return (TSR)
and Earnings before Interest and Taxes margin (EBIT %).
The Company’s business performance especially in 2018
was weak, improved in 2019 and achieved record high
levels in 2020 with the consequence that shares will be
awarded to the CEO in spring 2021.
As per the Terms and Conditions of the Matching
Restricted Share Plan, the CEO is entitled to receive
in total 20,000 Suominen shares (gross before taxes)
on the condition that he has personally invested into
10,000Suominen shares. The first part of the matching
shares was delivered in autumn 2020 and the second part
will be delivered in autumn 2021.
The CEO also has been granted participation to the
LTI Performance Periods 2019–2021, 2020–2022 and
2021–2023 that are currently on-going. The CEO must
hold 50% of the net number of shares given on the basis
of the Performance Share Plan as long as his shareholding
in total corresponds to the value of his annual gross
salary. Such number of shares must be held as long as his
employment or service in Suominen continues.
The objective of our Remuneration Policy is to enable
Suominen to oer the CEO a remuneration structure
that incentivizes towards the achievement of Suominen’s
strategic targets and long-term shareholder value
creation. Short-term and long-term performance-based
remuneration is used for rewarding good performance,
and the Board annually selects the optimal performance
metrics for each of the performance-based incentives.
KPI selections aim to steer our employees and the CEO
specifically towards the implementation of Suominen’s
strategy and achievement of sustainable financial results
in a competitive market.
Rewards under the LTI Performance Periods are
currently awarded based on three-year relative Total
Shareholder Return. This is the most important
performance indicator that the Board closely follows
to assess whether our strategy has been successfully
implemented in the long term. The PRC believes it is
appropriate to reward the Company’s key employees for
attaining long-term targets linked to the relative TSR as
it is a holistic way of measuring our overall success as a
company in terms of shareholder value creation.
On the other hand, financial and operative metrics
and strategic targets are being set and followed on an
annual Global STI Plan, which aligns short-term strategic
actions to long-term shareholder value creation. For the
financial year 2019, the CEO’s STI reward from the period
was based on Group EBIT and certain personal targets.
EBIT target achievement was between threshold and
target level, whereas the outcome of the personal targets
reached maximum level. In 2020, the CEO’s reward from
the STI was based on Group EBIT, Group Value Add and
specific personal targets. All targets for the CEO reached
the maximum outcome as aligned with the record high
2020. The maximum reward from the STI Plan for the
CEO was and is capped at 60% of annual base salary.
Suominen’s Remuneration Policy is aligned with
the remuneration principles applied to all Suominen
employees. The remuneration shall be fair and reflect
the competencies required to fulfill the requirements of
1.2 Pay-for-performance during the preceding five years
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64 Suominen Annual Report 2020
each position. Pay-for-performance philosophy is widely
followed in Suominen and many of the performance
metrics in the CEO’s incentive plans are concurrently used
in the employees’ incentive plans.
As Suominen has operations on three continents, the
remuneration markets in which Suominen operates vary
to an extent. The PRC believes that the most appropriate
internal comparison of the development of remuneration
over time is to compare the CEO and Board remuneration
with the average total pay of all Suominen employees.
Employee remuneration is inherently less volatile than
executive pay as a smaller portion of total remuneration
consists of variable remuneration and therefore typically
remains rather stable. However, as our incentive plans
are, to a varying degree, bound to the same or related
performance indicators, and remuneration is also aligned
with the performance of the company, region and/
or site for all personnel, the average employee pay has
increased during the past years due to improved company
performance.
As the Board members do not participate in any
incentive schemes, the Board remuneration has remained
rather stable with occasional increases to annual and
meeting fees. Variation mainly occurs due to dierent
number of meetings during the year. In 2020, there was
a change of actually paying all 2020 meeting fees during
the financial year, which is visible as increased total
remuneration for the Board.
During the last five years, remuneration for the CEO has
been aligned quite well with the company performance.
Exception is year 2018, which is due to the severance
payments made to the previous CEO. It is important to
note that the CEO remuneration in a specific year partly
reflects the performance of the preceding year in terms
of annual bonus and previous three years in terms of
long-term incentive payments. Therefore, the exceptional
performance in 2020 will not be fully visible in the CEO
remuneration until in 2021.
See the table on the next page for specific values.
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65Suominen Annual Report 2020
Five year development of remuneration and company performance
Current CEO (Petri Helsky) total remuneration¹
(EUR, ‘000) . .
Index² % %
Previous CEO (Nina Kopola) total remuneration³
(EUR, ‘000) . . .
Interim CEO (Tapio Engström) total remuneration⁴
(EUR, ‘000) .
Index² % % %
Employee pay (average)⁵
(EUR, ‘000) . . . . .
Index² % % % % %
Total Board remuneration⁶
(EUR, ‘000) . . . . .
Index² % % % % %
Jan Johansson . . . .
Andreas Ahlström . . . . .
Laura Raitio . . . . .
Sari Pajari-Sederholm . .
Björn Borgman .
Nina Linander .
Risto Anttonen . . . . .
Hannu Kasurinen . . . . .
Jaana Tuominen . . . .
Jorma Eloranta . .
3-year Total Shareholder Return (TSR)⁷
(%) .% .% -.% -.% .%
Share price development⁸
(EUR) . . . . .
Index² % % % % %
EBITDA
(EUR, ‘000 000) . . . . .
Index² % % % % %
¹ Current CEO started in January 2019. No annual bonuses or LTI based payments were paid to the CEO in 2019. CEO total remuneration includes all payments made to the CEO
during the financial year
² First year in the time-series set at 100%
³ Previous CEO pay in 2018 includes base and benefits until August 3, 2018, severance payments of EUR 482,819 and the value of receiving 14,182 shares as reward. No LTI based
payments occurred in 2016 and 2017. Previous CEO total remuneration includes all payments made to the CEO during the financial year
⁴ Interim CEO total remuneration in 2018 is for the time period he acted as interim CEO: August 4, 2018-December 31, 2018
⁵ Employee pay is the wages and salaries of our personnel as stated in the Financial Statements divided by the average number of employees during the respective financial year
⁶ Total Board remuneration may fluctuate during years due to dierent number of Board and/or Committee meetings arranged. In addition, for 2020, the fee structure was changed
slightly and all fees related to 2020 were actually paid during the year. Therefore, year 2020 is not fully comparable to previous years as it includes some meeting fees from 2019
and all 2020 fees
⁷ Total Shareholder Return (share price increase plus dividend yield) is calculated based on 3-month closing average prior to end of financial year. For example the 3-year TSR for
2016 is calculated as (Q4 2016 average share price - Q4 2013 average share price) / Q4 2013 average share price + (paid dividends in 2014, 2015 and 2016) / Q4 2013 average share
price
⁸ Share price development is calculated based on 3-month closing average prior to end of financial year
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66 Suominen Annual Report 2020
As stated in the Remuneration Policy approved at
the 2020 AGM, the General Meeting determines the
remuneration paid to the members of the Board in
advance, for one year at a time. Shareholders’ Nomination
Board prepares independently a proposal on the
remuneration of the Board to be presented for the
General Meeting.
The basis for determination of the Board remuneration
is to ensure that the remuneration is competitive in
relation to the market and that the remuneration reflects
the competencies and eorts required from the members
of the Board to fulfill their duties.
Suominen’s AGM held on March 19, 2020 resolved that
the remuneration payable to the members of the Board is
as follows:
- The Chair will be paid an annual fee of EUR 66,000
- The Deputy Chair and other Board members an annual
fee of EUR 31,000
- Chair of the Audit Committee will be paid an additional
fee of EUR 10,000
- Further, the members of the Board will receive a fee for
each Board and Committee meeting as follows:
- EUR 500 for each meeting held in the home country
of the respective member
- EUR 1,000 for each meeting held elsewhere than in
the home country of the respective member
- EUR 250 for each meeting held as telephone
conference
60% of the annual fee was paid in cash and 40%
in Suominen’s shares. The number of shares to be
transferred was determined based on the share value in
the stock exchange trading maintained by Nasdaq Helsinki
Ltd, calculated as the trade volume weighted average
quotation of the share during the one-month period
immediately following the date on which the interim
report of January–March 2020 of the Company was
published. The shares were transferred out of the own
shares held by the Company by the decision of the Board
on May 26, 2020.
Members of the Board are not employees of Suominen
and do not participate in any Suominen incentive scheme
or pension arrangement. All payments to the members
of the Board during the financial year 2020 have been in
compliance with the Remuneration Policy. In 2020, the
following fees were paid to the members of the Board:
2. Remuneration of the Board of Directors
for the preceding financial year
At the AGM on March 19, 2020, the shareholders resolved
to favor the Remuneration Policy pursuant to the Board’s
proposal. The PRC and the Board have considered the
feedback provided by the shareholders at the 2020 AGM
and have concluded that there is currently no need
to present an amended Remuneration Policy at the
2021AGM.
During 2020, Suominen has not exercised any rights to
reclaim (clawback) or cancel (malus) any paid or unpaid
incentives.
Also, there was no need to deviate from the Policy
during 2020.
1.3 Information on the previous vote for the Remuneration Policy
and any deviations or clawbacks made
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67Suominen Annual Report 2020
Remuneration of the Board of Directors in 2020
Annual
remuneration paid
in cash (EUR)
Value of
the annual
remuneration
paid in shares
(EUR)
Annual
remuneration
paid in shares
(nr of shares)
Meeting
fees (EUR) Total (EUR)
Jan Johansson Chair ,. ,. , , ,
Andreas Ahlström Deputy Chair ,. ,. , , ,
Laura Raitio Member ,. ,. , , ,
Sari Pajari-Sederholm Member ,. ,. , , ,
Björn Borgman Member as of March
19, 2020
,. ,. , , ,
Nina Linander Chair of Audit
Committee as of March
19, 2020
,. ,. , , ,
Risto Anttonen Member until March
19, 2020
N/A N/A , ,
Hannu Kasurinen Member until March
19, 2020
N/A N/A , ,
Remuneration of the members of the Board of Directors, including the value of the remuneration paid in Suominen shares, totaled EUR 275,250 in 2020.
Additionally, compensation for expenses has been paid in accordance with the Company’s travel policy.
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68 Suominen Annual Report 2020
In 2020, the CEO’s remuneration consisted of fixed base
salary (including fringe benefits), supplementary pension
and variable incentives. Payments from variable incentives
were made under the annual Global STI Plan 2019 and
Matching Restricted Share Plan.
In 2020, the CEO was paid a total remuneration of
EUR745,398. Total remuneration consisted of salaries and
benefits EUR 442,451, supplementary pension payments
EUR 71,315, Annual STI (cash bonus) EUR 181,712
and value of LTI reward from the Matching Restricted
Share Plan EUR 49,921 (4,676 Suominen shares + cash
proportion to cover taxes).
The payment under the annual Global STI Plan was
based on overall achievement between target and
maximum for the KPIs set for 2019.
The relative proportion of fixed pay was 66% and
variable pay 34%. The PRC considers the one-o
Matching Restricted Share Plan award made to the CEO
to be variable pay as the reward value is determined by
the share price at a future date. Non-statutory pensions
are considered neither fixed nor variable pay.
STI 2019 KPIs and achievement
for the President & CEO¹
KPI Weight Achievement
Group EBIT 50% Between threshold and target
Personal targets 50% Reached maximum
Total 100% Between target and maximum
¹ STI 2019 paid during 2020
3. Remuneration of the President & CEO
for the preceding financial year
Base + benefits 59%
59
Non-statutory
pension 10%
10
STI 24%
24
LTI (MRSP) 7%
7
Total CEO pay in 2020 in proportions
Base + benefits 59%
Non-statutory pension 10%
STI 24%
LTI (MRSP) 7%
9
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69Suominen Annual Report 2020
The CEO remuneration in 2020 is further described in the table below.
Element Quantum
Purpose, link to strategy and description from the
remuneration policy Comment on compliance
Base Salary +
Benefits
Paid in 2020
(including
holiday pay):
Base salary:
EUR 424,862
Benefits:
EUR 17,588
The purpose is to provide fixed remuneration that
is competitive with the external market and reflects
the scale and complexity of the Company’s business.
Base salary includes taxable fringe benefits,
such as company car, lunch and telephone. Base
salary is determined based on variety of factors,
such as market level and the individual’s skills
and experience. Base salary is typically reviewed
annually.
Complies with the Policy: The CEO has benefits
such as company car, health insurance, lunch
and telephone. The CEO did not receive a base
salary increase in 2020 and based on external
remuneration benchmark, the salary level is
competitive with the external market.
Supplementary
Pension
Arrangement
Paid in 2020:
EUR 71,315
The purpose is to provide a competitive level of
retirement income. The supplementary pension
plan is a defined-contribution pension scheme.
The pension allowance is determined based on the
CEO’s annual base salary, benefits and cash bonus.
Complies with the Policy: The CEO participates
in a non-statutory defined contribution pension
plan. The Company’s contribution was 11.5% of the
annual base salary, benefits and cash bonus in 2020.
Pension starts from the age of 63.
Cash Bonus
(Short-Term
Remuneration)
Earned from
financial year 2019,
paid in 2020:
EUR 181,712
The purpose is to steer towards and reward for the
achievement of short-term financial and operational
performance and to support the delivery of the
business strategy. Performance is measured over
one year and the cash bonus is paid after the year
end. The cash bonus is paid in cash based on
achieved one-year performance.
Complies with the Policy: Maximum STI% in
2019 and 2020 was 60% of the annual base
salary (excluding holiday pay). In 2019, the total
achievement was between target and maximum and
in 2020 reached maximum.
Earned from
financial year
2020, to be paid
in 2021:
EUR 244,800
Share-Based
Incentive Plans
(Long-Term
Remuneration)
Matching
Restricted Share
Plan (“MRSP”) paid
in 2020:
10,000 gross
shares with a value
of EUR 49,921.
Net shares
delivered: 4,676
Matching
Restricted Share
Plan (“MRSP”) to
be paid in 2021:
10,000 gross
shares
The purpose is to reward for the delivery of long-
term shareholder value, to align the President &
CEO’s interests with those of the shareholders and
to increase the value of the Company by oering
a share ownership-based reward structure. The
President & CEO may have share-based incentive
plans, which reward for Company performance or
which are used for retention purposes.
Currently Suominen’s performance-based long-term
incentive mechanism is a Performance Share Plan
(the “PSP”), which oers the President & CEO the
opportunity of earning predetermined number of
Suominen shares as a reward. Payment of the reward
is dependent on the achievement of performance
targets set by the Board of Directors and continued
employment. Matching Restricted Share Plan (the
“MRSP”) is used for retention purposes and to
promote immediate share ownership.
The Board of Directors resolves the maximum
number of shares that can be earned from the
Performance Share Plan. Long-term incentive
awards are denominated in number of Suominen
shares but paid in shares and cash intending to cover
the taxes that incur from the receipt of shares.
Complies with the Policy: The CEO was eligible in
the PSP Performance Period 2018–2020 in which
the total achievement of the two KPIs was between
threshold and target. Therefore, the CEO will be
rewarded with 22,581 gross shares in spring 2021.
The Board has resolved the maximum number of
shares that can be earned from the PSP. Additionally,
the performance based LTI plans have a share
price cap, which cuts the reward if the limits set by
the Board for the share price are reached. These
limits were not reached in Performance Period
2018–2020.
In the MRSP, the CEO has invested in Suominen
shares and in return for the investment, he shall
receive free Suominen shares in relation to his own
investment after a vesting period. Prerequisite for
the reward payment is continuation of service.
The matching shares will be delivered in two equal
installments in 2020 and 2021, 10,000 gross shares
in each. First installment of 4,676 net shares were
delivered to the CEO during 2020. Payment was
made partially in shares and cash.
The CEO is also eligible for PSP Performance Periods
2019–2021, 2020–2022 and 2021–2023 in which his
total potential reward from all Performance Periods
combined corresponds approximately to the value
of 504,500 shares (including also the proportion to
be paid in cash).
Earned from LTI
Performance
Period 2018–2020,
to be paid in 2021:
22,581 gross
shares
Share
Ownership
Prerequisite
The CEO must hold 50% of the net number of shares
given based on long-term performance-based plan,
until his or her shareholding in total corresponds
to the value of his/her annual gross salary. Such
number of shares must be held as long as his or her
service in the Company continues.
Complies with the Policy: The CEO has not yet
received any shares from performance-based plans.
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70 Suominen Annual Report 2020
More detailed, up-to-date information on the principal working
experience and positions of trust of the members of the Board
is available at www.suominen.fi. Information on the Board’s
remuneration is included in Suominen’s Remuneration Report.
*Shareholding refers to shares and share-based rights of each director and
thecorporations over which he/she exercises control in on December 31, 2020.
Board of Directors
DECEMBER 31, 2020
JAN JOHANSSON
b. 1954
LL.M.
Member of the Board since 2017
Chair of the Board since 2017
Independent member
Shareholding*:
29,563 Suominen shares
BJÖRN BORGMAN
b. 1975
M.Sc. (Industrial Engineering)
CEO, HL Display AB
Member of the Board since 2020
Independent member
Shareholding*:
8,890 Suominen shares
ANDREAS AHLSTRÖM
b. 1976
M. Sc. (Economics and Business
Administration)
Investment Director,
Ahlström Capital Oy
Member of the Board since 2015
Deputy Chair of the Board since 2020
Non-independent member
Shareholding*:
19,180 Suominen shares
LAURA RAITIO
b. 1962
Licentiate of Technology
(Forest Products Technology)
Member of the Board since 2015
Independent member
Shareholding*:
19,180 Suominen shares
NINA LINANDER
b. 1959
B.Sc. (Economics) and MBA
Member of the Board since 2020
Independent member
Shareholding*:
17,669 Suominen shares
SARI PAJARI
SEDERHOLM
b. 1968
M.Sc. (Technology)
Senior Vice President, Sales and
Marketing, Metsä Board Corporation
Member of the Board since 2019
Independent member
Shareholding*:
8,401 Suominen shares
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71Suominen Annual Report 2020
Executive Team
DECEMBER 31, 2020
PETRI HELSKY
President & CEO
b. 1966
M.Sc. (Economics)
M.Sc. (Technology)
Joined Suominen in 2019
Shareholding*:
22,676 Suominen shares
LYNDA A. KELLY
SVP, Americas & Business
Development
b. 1964
B.Sc. (Business Administration/
Marketing)
Joined Suominen in 2014
Shareholding*:
18,759 Suominen shares
KLAUS KORHONEN
SVP, HR & Legal
b. 1974
LL.M.
Joined Suominen in 2019
Shareholding*:
14,676 Suominen shares
MIMOUN SAÏM
SVP, Operations
b. 1964
ENSI Engineering
Joined Suominen in 2011
Shareholding*:
29,060 Suominen shares
TONI TAMMINEN
CFO
b. 1978
D.Sc. (Technology)
M.Sc. (Economics)
Joined Suominen in 2019
Shareholding*:
2,700 Suominen shares
MARKKU KOIVISTO
SVP, Europe & R&D
b. 1971
M.Sc. (Technology)
Joined Suominen in 2017
Shareholding*:
14,822 Suominen shares
More detailed, up-to-date information on the principal
working experience and positions of trust and remuneration
of the members of Suominen’s Executive Team is available at
www.suominen.fi.
*Shareholding refers to the shares and share-based rights of each executive and
corporations over which he/she exercises control in on December 31, 2020.
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72 Suominen Annual Report 2020
FINANCIAL INFORMATION
JANUARY 1DECEMBER 31, 2020
Provisions…132
Trade payables and other liabilities…132
Revenue from contracts with customers…133
Entity-wide disclosures…134
Other operating income and expenses…135
Leases…135
Fees paid to auditors…138
Employee benefits…138
Depreciation and amortization…139
Financial income and expenses…140
Income taxes…141
Share-based payments…145
Earnings per share…148
Adjustments to statement of cash flows…148
Related parties…149
Contingent liabilities…151
Restatement of previously published figures…151
Events after the reporting period…152
Key ratios per share…154
Calculation of key ratios per share…155
PARENT COMPANY FINANCIAL
STATEMENTS (FAS)…158
Income statement…158
Balance sheet…159
Cash flow statement…161
Notes…162
AUDITOR’S REPORT…172
KEY RATIOS…176
Calculation of key ratios…177
REPORT BY THE BOARD OF DIRECTORS…75
CONSOLIDATED FINANCIAL STATEMENTS (IFRS)…92
Consolidated statement of financial position…92
Consolidated statement of profit or loss…93
Consolidated statement of other comprehensive
income…93
Consolidated statement of changes in equity…94
Consolidated statement of cash flows…95
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS…96
Significant accounting policies – consolidated financial
statements…96
Critical accounting estimates and judgements…98
Financial risk management…99
Management of capital…104
Goodwill…105
Intangible assets…107
Property, plant and equipment…109
Right-of-use assets…111
Group companies…112
Inventories…112
Equity instruments…113
Receivables…114
Financial assets…117
Fair value hierachy…119
Other comprehensive income…120
Information on Suominen share…121
Interest-bearing liabilities…124
Classification of financial liabilities…127
Derivative instruments…128
Defined benefit plans…130
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74 Financial information | Suominen Annual Report 2020
Highlights of Suominen’s financial year 2020
- Net sales increased by 11.5% and were EUR458.9 million (411.4)
- Operating profit improved significantly to EUR39.5 million (8.1)
- Cash flow from operations was strong and was EUR57.0 million (29.9)
- Board of Directors proposes to the Annual General meeting a dividend of EUR0.10 per share and in addition to the
dividend, a return of capital of EUR0.10 per share
REPORT BY THE BOARD
OF DIRECTORS 2020
Key figures
Net sales, EUR million . . .
EBITDA, EUR million . . .
Comparable operating profit, EUR million . . .
Operating profit, EUR million . . .
Profit for the period, EUR million . . -.
Earnings per share, basic, EUR . . -.
Earnings per share, diluted, EUR . . -.
Cash flow from operations per share, EUR . . .
Return on invested capital, rolling 12 months, % . . .
Gearing, % . . .
Dividend and return of capital per share, total, EUR* .* . −
* 2020 the proposal of the Board of Directors to Annual General Meeting
The figures shown in brackets refer to the performance in 2019, unless otherwise stated.
Net sales
In 2020, Suominen’s net sales increased by 11.5% from
the comparison period to EUR458.9 million (411.4). Sales
volumes increased while sales prices decreased following
lower raw material prices. Currencies impacted net sales
negatively by EUR11.7 million.
Net sales of Americas business area were EUR289.1
million (261.7) and net sales of Europe business area
EUR169.9 million (149.8).
Operating profit and result
Operating profit improved significantly and amounted to
EUR39.5 million (8.1) due to higher production and sales
volumes, favorable raw material prices, and improved
production and raw material eciency. Currencies
impacted operating profit negatively by EUR2.2 million.
In 2020, profit before income taxes was EUR33.9
million (2.1). Income taxes for the financial year, EUR-3.8
million (-1.9), were impacted by recognition of additional
deferred tax assets from previous years’ losses as
the possibility to utilize the losses has increased. The
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75Suominen Annual Report 2020 | Report by the Board of Directors
corporate income taxes were also positively impacted in
the first quarter by the US tax reliefs enacted as a result of
the COVID-19 pandemic.
The profit for the period was EUR30.1 million (0.2).
Net sales, EBITDA and operating profit
EUR thousand
Net sales , , ,
EBITDA , , ,
Operating profit , , ,
Comparable operating profit , , ,
Financing
The Group’s net interest-bearing liabilities, calculated with
the nominal value of the interest-bearing liabilities at the
end of the review period, December 31, 2020, amounted
to EUR37.1 million (67.2). Gearing was 25.4% (50.7%) and
equity ratio 46.0% (42.7%).
In 2020, net financial expenses were EUR-5.6 million
(-6.0), or 1.2% (1.5%) of net sales. Net eect of changes in
foreign exchange rates in financial items were EUR-0.4
million (+0.2). The net financial expenses include a bad
debt provision based on expected credit losses of loan
receivables totaling EUR-0.7 million and a fair value
change of assets of EUR+0.3 million.
Cash flow from operations in 2020 was EUR57.0 million
(29.9). Cash flow from operations per share in 2020 was
EUR0.99 (0.52). The financial items in the cash flow
from operations, in total EUR-4.3 million (-5.2), were
principally impacted by the interests paid during the
reporting period. The income taxes in the cash flow from
operations were positively impacted by an appr. EUR2.6
million tax refund due to US tax reliefs. The change in the
net working capital was EUR1.0 million negative (EUR1.6
million positive).
On July 13, 2020 Suominen announced that it had
entered into a new single-currency syndicated revolving
credit facility agreement of EUR100 million with a
maturity of three years with two one-year extension
options. The lenders for the facility are Danske Bank
A/S, Finland Branch and Nordea. The new credit facility
includes leverage ratio and gearing as financial covenants.
The margin of the facility will increase or decrease
dependent on Suominen meeting two sustainability key
performance indicators (“KPI”), namely:
- Increase in the sales of sustainable products
- Reduction of greenhouse gas emissions
The new credit facility replaced the EUR100 million
syndicated revolving credit facility agreement provided
by Nordea and Svenska Handelsbanken AB (publ), Branch
Operation in Finland as the lenders.
Capital expenditure
Suominen announced in April that it strengthens its
capabilities for sustainable products by enhancing one
of its production lines in Cressa, Italy. The investment
is made in line with the strategy and will increase
Suominen’s ability to respond to the growing demand of
sustainable nonwovens. The total value of the investment
is approx. EUR4 million and it will be finalized during the
second half of 2021.
Suominen announced in August that it increases its
spunlace capacity in Europe by upgrading and restarting
one of its existing production lines in Cressa, Italy. The
investment will strengthen Suominen’s capabilities in
Europe and it is made in line with the strategy aiming for
growth. The total value of the investment is approx. EUR8
million and it will be finalized during the second half of
2021.
Suominen announced in November that it increases
its capabilities in the Americas by upgrading one of
its production lines in Bethune, South Carolina, USA.
The investment will widen Suominen’s oering to its
customers in the US in line with the Suominen strategy
targeting growth and profitability. The total value of the
investment is approx. EUR6 million and the investment
project will be finalized during the second half of 2021.
In 2020, the gross capital expenditure totaled
EUR10.4 million (11.2). The largest items in gross capital
investments were mainly related to the investments
in Cressa. The other investments were mainly for
maintenance.
Depreciations and amortizations were EUR-21.4 million
(-25.5).
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76 Report by the Board of Directors | Suominen Annual Report 2020
Capital expenditure and depreciation and
amortization
EUR thousand
Gross capital expenditure , , ,
% of net sales . . .
Depreciation and amortization -, -, -,
Key ratios
Return on equity (ROE), % . . -.
Return on invested capital (ROI), % . . .
Equity ratio, % . . .
Interest-bearing net debt, EUR
million* . . .
Capital employed, EUR million . . .
Gearing, % . . .
* At nominal value
Key ratio per shares
Earnings per share, EUR, basic . . -.
Earnings per share, EUR, diluted . . -.
Cash flow from operations per
share, EUR . . .
Equity per share, EUR . . .
Price per earnings per share (P/E)
ratio . . -.
Dividend and return of capital per
share, EUR* . . −
Dividend payout ratio, % . ,. −
Dividend yield, % . . −
* 2020 the proposal of the Board of Directors to Annual General Meeting
Key ratios per share are share issue adjusted. Definitions
for key ratios per share are presented in the consolidated
financial statements. Key ratios are alternative
performance measures and the definitions of them are
presented in the annual report.
Quarterly development 2020
EUR thousand Q Q Q Q
Net sales , , , , ,
EBITDA , , , , ,
% of net sales . . . . .
Operating profit , , , , ,
% of net sales . . . . .
Net financial expenses - -, -, -, -,
Profit before income taxes , , , , ,
% of net sales . . . . .
Impacts of the COVID-19 pandemic on
Suominen
The health and safety of Suominen’s employees is our
key priority. Suominen aims to secure the health and
safety of its employees through several measures and is
closely monitoring the COVID-19 situation. Thanks to our
proactive approach, so far there has been only limited
impact on our ability to serve our customers and run our
operations.
As a nonwovens manufacturer Suominen is an integral
part of the supply chain making disinfecting and cleaning
products for fighting the coronavirus. The authorities have
classified our nonwovens production as essential in the
jurisdictions where other business activities have been
shut down.
The pandemic has increased consumption of
nonwovens in all our markets and the demand is expected
to continue on a high level. In the long term COVID-19
may lead to a sustained increase in the demand for
nonwovens for cleaning and disinfection products.
Both Suominen’s financial position and cash flow have
remained strong throughout the pandemic.
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77Suominen Annual Report 2020 | Report by the Board of Directors
The key risks caused by COVID-19 are related to the
health and safety of Suominen personnel and customers,
possible shortages of raw materials, issues linked to
logistics as well as potential closures of customers’
or our own plants due to virus infections or authority
decisions. These risks remain valid in the beginning of
2021 as unfortunately the coronavirus situation has been
deteriorating in many countries and so far vaccinations
in many countries have not progressed as rapidly as
could perhaps have been hoped. Some of these risks
have materialized as some of our customers’ production
facilities have been temporarily closed because of
infections.
We have implemented extensive precautions to protect
the health and safety of our employees and to ensure
business continuity and progress of our strategic projects
during these unusual times. We continuously monitor the
raw material situation closely and we have identified risk
mitigation measures such as utilization of supplementary
raw material sources.
The vast majority of our customers have experienced
increased demand for their products and thus our
customer credit risks have not materially increased. The
COVID-19 pandemic has not increased Suominen’s risk of
impairment losses on non-current assets.
Research and development
At Suominen, research and development activities
are organized into R&D function. In the end of 2020,
R&D function had 15 (19) employees. Research and
development expenses amounted to EUR2.8 million (3.4),
corresponding to 0.6% (0.8%) of net sales.
Suominen’s vision is to be the frontrunner for
nonwovens innovation and sustainability. In addition, one
of the five focus areas of the strategy is to dierentiate
with innovation and commercial excellence. Legislation
and consumer behavior drive for more sustainable
products and we are preparing for the growing demand
by continuously developing new products made of
renewable, recycled, compostable or plastic-free materials.
Suominen Corporation, the parent company of the
Group, owns all business-related patents and related
technologies, know-how, processes, recipes and all other
solutions developed by Suominen Corporation. The
company is targeting to have extensive industrial rights to
the nonwoven-based solutions and technologies as well
as test and pilot equipment needed. This way it can oer
best possible support to the Group companies to satisfy
the current and future customer needs.
Employees
During 2020, Suominen employed 689 people (685) on
average, and 691 (669) people at the end of 2020. The
increase was primarily in the Operations function.
Personnel related key ratios
Average number of personnel
Wages and salaries,
EUR thousand -, -, -,
Suominen’s statement of non-financial
information
1. Business model
Suominen manufactures nonwovens as roll goods.
Suominen sources its raw materials from fiber producers
globally and sells its products to converters and brand
owners who then convert and package nonwoven fabrics
into both consumer goods and professional end products.
Suominen’s main market areas are North America and
Europe. Suominen also operates in the South American
markets. In 2020, Suominen’s net sales were EUR458.9
million and the company employed 689 people on
average.
Suominen’s vision is to be the frontrunner for
nonwovens innovation and sustainability. Suominen aims
to grow by creating innovative and more sustainable
nonwovens for its customers and to improve its
profitability through more ecient operations and a high
performance culture. Suominen’s main focus is on wipes.
More information about Suominen’s value creation can be
found in the Annual Report p. 9
Sustainability is an integral part of Suominen’s strategy.
The company is committed to systematic development
of responsible business in its strategy and operations.
Suominen’s sustainability agenda and concrete targets
and KPIs for 2020–2025 were launched in 2020. Our
target is to be the most sustainable nonwovens company
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78 Report by the Board of Directors | Suominen Annual Report 2020
on the market. We strive to decrease environmental
impacts of our operations and to continuously develop
our safety culture and employee engagement as well as
responsible sourcing of raw materials.
Risk management at Suominen
Suominen’s risk management model covers strategic,
operational, financial, and hazard risks. Our risk
management process is based on systematic and periodic
risk assessments where key risks are identified and risk
management and mitigation actions captured. The process
is managed by Suominen’s Risk Management Ocer. Each
risk is assigned a risk owner who is responsible for the risk
mitigation actions. In 2020, risk assessment was integrated
in the strategy process and risks were assessed against
Suominen’s strategic objectives. Suominen’s risks and risk
management practices, including risks related to non-
financial items are described in more detail in the Business
risk and uncertainties section.
2. Identification of material sustainability
themes for Suominen
In order to determine the most material sustainability
themes for Suominen from the company’s business
and stakeholders’ perspective, a materiality assessment
was conducted in 2019. This process included a global
stakeholder survey and an internal workshop. The
respondents in the survey represented a wide range of
stakeholders including customers, employees, shareholders,
investors, suppliers and industry associations. As a result of
the process Suominen defined four sustainability themes
covering the most material sustainability topics for us:
people and safety, sustainable nonwovens, low impact
manufacturing and corporate citizenship.
Suominen’s sustainability agenda is approved by the
Board of Directors, and the Executive Team is responsible
for defining and leading the implementation
of sustainability initiatives to meet the targets.
3. The environment
Operating principles
For Suominen the material aspects of environmental
responsibility include our targets to minimize the
environmental impacts of our products throughout their
life cycle, to reduce the environmental impacts of our
own operations and to continuously develop responsible
sourcing practices.
We have recognized that we need to take under
consideration the whole value chain in order to reduce
the environmental impacts of our nonwovens products.
Therefore, we are committed to developing more
sustainable products by using raw materials with smaller
environmental footprints as well as continuously minimizing
the environmental impacts of our own production.
The most material environmental impacts of our own
production are water consumption, waste generation as
well as energy consumption and the related generation of
greenhouse gases.
The general operating principles governing the
management of environmental issues are documented
in Suominen’s Code of Conduct. Seven out of our eight
plants have a certified environmental management system
(ISO14001) and related environmental policies in place.
In addition, all Suominen plants have a certified quality
management system (ISO 9001) in place. Our Supplier
Code of Conduct includes requirements concerning
environmental responsibility.
Performance indicators, targets and results
Suominen launched its sustainability agenda, targets, and
KPIs for 2020–2025 in 2020. Minimizing environmental
impacts of our own operations and developing and oering
sustainable nonwovens are the key environment-related
themes in our sustainability agenda.
Our target is to reduce our energy consumption,
greenhouse gas emissions, water intake and waste to landfill
by 20% per ton of product by 2025 compared to the base
year 2019. In 2020, our energy consumption decreased
by 8.0%, greenhouse gas emissions by 14.9%, water
consumption by 12.2% and waste to landfill 2.4%. All figures
are per ton of product and compared to the base year 2019.
Regarding sustainable products, our target is to increase
their sales by 50% by 2025 and to have over 10 sustainable
product launches per year. In 2020, our sales of sustainable
products increased by 22.5% compared to 2019 and we had
9 sustainable product launches.
There were no significant environmental incidents
resulting from major permit violations, claims or
compensations in 2020.
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79Suominen Annual Report 2020 | Report by the Board of Directors
You can read more about our sustainability work in the
Annual Report p. 18.
4. Social and personnel-related issues
Operating principles
Suominen’s material aspects relating to social and
personnel-related issues are health and safety and
employee engagement. Suominen has committed to
ensure its employees, contractors and others working
for the company a safe and healthy work environment.
Suominen has a strong focus on occupational safety and
accident prevention. Suominen has established lifesaving
rules and a Behavior Based Safety Program to enforce its
safety culture.
Suominen is also committed to providing a fair and
respectful place to work. Suominen recognizes the
business benefits of having a diverse workforce and aims
to provide equal opportunities for everyone. We do not
accept any kind of discrimination, including discrimination
due to age, gender, religion or ethnic origin. We expect
everyone to be treated with respect and do not tolerate
any form of harassment. We follow blind hiring principle in
new recruitments when possible to promote diversity and
to ensure equal opportunities when applying for a job.
We provide working conditions that comply with
local statutory requirements and collective bargaining
agreements and we support basic labor rights as defined
in the Declaration on Fundamental Principles and
Rightsat Work by the International Labour Organization.
We respect our employees’ right to form or join trade
unions and to bargain collectively. We specifically
andstrictly prohibit and do not tolerate or engage in any
forms of forced labor, child labor, human tracking or
slavery.
The operating principles concerning health, safety
and our labor practices are documented in the Code of
Conduct.
Performance indicators, targets and results
Suominen launched its sustainability agenda, targets, and
KPIs for 2020–2025 in 2020. Safety, increasing employee
engagement and building a high-performance culture
are the key people-related themes on our sustainability
agenda.
Reducing the number of accidents is the key target of
Suominen’s safety work. Our target is to have zero lost
time accidents. In 2020, one lost time accident occurred
at our plants.
Increasing employee engagement is a key sustainability
target relating to our people. We conducted a global
employee engagement survey in 2020, and based on
the results our employee engagement index in 2020 was
69%. The index is a combination of questions concerning
our people’s retention, likelihood to recommend the
company, organizational pride and commitment. The
results from the survey will be used to create concrete
action plans in order to systematically develop our
employee engagement in the future. Our target is that our
engagement index will be 73% by 2025.
Indicator
Health and safety LTA* LTA* LTA*
Employee engagement index % N/A N/A
*Lost time accident
You can read more about our sustainability work in the
Annual Report p. 18.
5. Respect for human rights
Suominen recognizes its responsibility to respect human
rights and requires its business partners to do the same.
Suominen complies with local, regional and
international laws and regulations and respects the
protection of human rights as defined in the United
Nation’s Universal Declaration on Human Rights. Our
commitment to respecting human rights is stated in our
Code of Conduct which was renewed in 2020 according
to our sustainability agenda targets. Training on the Code
will be held for all employees during 2021.
All of Suominen’s suppliers are expected to comply
with Suominen’s Supplier Code of Conduct. Our target is
to establish a raw material supplier auditing process and
to have our suppliers (based on risk assessment) audited
against the Supplier Code by 2025. Human right topics
will be incorporated into this supplier auditing process.
In 2020, no violations related to human rights were
reported.
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80 Report by the Board of Directors | Suominen Annual Report 2020
6. Prevention of corruption and bribery
Suominen is committed to complying with all applicable
laws and regulations. Suominen’s operations are ethical
and transparent and our responsibility requirements apply
also to our suppliers.
Suominen’s Code of Conduct and Anti-Corruption
Policy guide our operations regarding the prevention of
corruption and bribery. All employees are expected to be
aware of and comply with applicable laws and regulations
and are encouraged to seek legal advice if in doubt. Any
employee who becomes aware of an actual or potential
violation of the Code has the responsibility to speak up.
Our Code of Conduct was renewed in 2020 according
to our sustainability agenda targets and training will be
arranged for all employees.
We select our business partners carefully and
collaborate only with those who conduct business
ethically and responsibly. We expect our suppliers and the
business partners that act on our behalf to understand
and comply with all applicable laws and regulations and to
apply the same legal and ethical standards that Suominen
practices. Suominen’s suppliers must also comply with
our Supplier Code of Conduct which prohibits all forms
of corruption. Bribes, kickbacks, facilitating and similar
payments to government ocials or to Suominen
employees or agents acting on Suominen’s behalf are
prohibited. Our target is to establish a raw material
supplier auditing process and to have our suppliers (based
on risk assessment) audited against our Supplier Code by
2025. Corruption and bribery topics will be incorporated
into this supplier auditing process.
In 2020, no corruption or bribery cases were identified.
Share information
Share capital
The number of Suominen’s registered shares was
58,259,219 on December 31, 2020, equaling to a share
capital of EUR11,860,056.00. Suominen has one series of
shares. Each share carries one vote in the Shareholders’
Meeting and right to an equally-sized dividend.
Suominen’s shares are aliated in a book-entry system.
Share trading and price
The number of Suominen Corporation shares (SUY1V)
traded on Nasdaq Helsinki from January 1 to December
31, 2020 was 12,937,753 shares, accounting for 22.5% of
the average number of shares (excluding treasury shares).
The highest price was EUR5.36, the lowest EUR2.00 and
the volume-weighted average price EUR4.29. The closing
price at the beginning of the review period, on January
2, 2020, was EUR2.34 and the closing price on the last
trading date of the review period, on December 30, 2020,
was EUR5.08.
The market capitalization (excluding treasury shares)
was EUR292.4 million on December 31, 2020.
Authorizations of the Board of Directors
The Annual General Meeting (AGM) held on March 19,
2020 authorized the Board of Directors to decide on the
repurchase of a maximum of 400,000 of the company’s
own shares. The company’s own shares shall be
repurchased otherwise than in proportion to the holdings
of the shareholders by using the non-restricted equity
through trading on regulated market organized by Nasdaq
Helsinki Ltd at the market price prevailing at the time of
acquisition. The shares shall be repurchased and paid
in accordance with the rules of Nasdaq Helsinki Ltd and
Euroclear Finland Ltd. The shares shall be repurchased to
be used in the company’s share-based incentive programs,
in order to disburse the remuneration of the members
of the Board of Directors, for use as consideration in
acquisitions related to the company’s business, or to be
held by the company, to be conveyed by other means or
to be cancelled. The Board of Directors shall decide on
other terms and conditions related to the repurchase of
the company’s own shares. The repurchase authorization
shall be valid until June 30, 2021 and it revokes all earlier
authorizations to repurchase company’s own shares.
The AGM held on March 19, 2020 also authorized
the Board of Directors to decide on issuing new shares
and/or conveying the company’s own shares held
by the company and/or granting options and other
special rights referred to in Chapter 10, Section 1 of
the Finnish Companies Act. New shares may be issued,
and the company’s own shares may be conveyed to
the company’s shareholders in proportion to their
current shareholdings in the company; or by waiving the
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81Suominen Annual Report 2020 | Report by the Board of Directors
shareholder’s pre-emption right, through a directed share
issue if the company has a weighty financial reason to do
so, such as, for example, using the shares as consideration
in possible acquisitions or other arrangements related
to the company’s business, as financing for investments,
using shares as part of the company’s incentive program
or using the shares for disbursing the portion of the
Board members’ remuneration that is to be paid in shares.
The new shares may also be issued without payment to
the company itself. New shares may be issued and/or
company’s own shares held by the company or its group
company may be conveyed at the maximum amount of
5,000,000 shares in aggregate.
The Board of Directors may grant options and other
special rights referred to in Chapter 10, Section 1 of the
Finnish Companies Act, which carry the right to receive
against payment new shares or own shares held by the
company. The right may also be granted to the company’s
creditor in such a manner that the right is granted on
condition that the creditor’s receivable is used to set o the
subscription price (“Convertible Bond”). However, options
and other special rights referred to in Chapter 10, Section
1 of the Companies Act cannot be granted as part of the
company’s remuneration plan.
The maximum number of new shares that may be
subscribed and own shares held by the company that may
be conveyed by virtue of the options and other special rights
granted by the company is 5,000,000 shares in total which
number is included in the maximum number stated above.
The authorizations shall revoke all earlier authorizations
regarding share issue and issuance of special rights entitling
to shares. The Board of Directors shall decide on all other
terms and conditions related to the authorizations. The
authorizations shall be valid until June 30, 2021.
On May 28, 2020 Suominen announced about the
portion of the annual remuneration of the members of
the Board of Directors which was paid in shares. The
total number of the shares that were granted out of the
treasury shares was 29,121 shares. On September 16, 2020,
in accordance with the matching share-based payment
program, 9,352 shares were transferred to the participants
of the program.
After these transactions, the maximum amount of the
authorization is 4,961,527 shares in aggregate.
Remuneration of the Board payable in shares
The AGM held on March 19, 2020 confirmed the
remuneration of the Board of Directors. The Chair will be
paid an annual fee of EUR66,000 and the Deputy Chair
and other Board members an annual fee of EUR31,000.
Chair of the Audit Committee will be paid an additional
fee of EUR10,000. Further, the members of the Board
will receive a fee for each Board and Committee meeting
as follows: EUR500 for each meeting held in the home
country of the respective member, EUR1,000 for each
meeting held elsewhere than in the home country of the
respective member and EUR250 for each meeting held as
telephone conference.
60% of the annual remuneration is paid in cash and 40%
in Suominen Corporation’s shares.
The number of shares forming the remuneration
portion which is payable in shares was determined
based on the share value in the stock exchange trading
maintained by Nasdaq Helsinki Ltd, calculated as the trade
volume-weighted average quotation of the share during
the one month period immediately following the date on
which the Interim Report of January–March 2020 of the
company was published. The shares were given out of the
treasury shares held by the company by the decision of
the Board of Directors on May 28, 2020.
Since the decision taken by the Board of Directors was
essentially an execution of a detailed resolution taken
by the AGM, the Board did not exercise independent
discretion when it decided on the transfer of the shares.
The transferred shares are of the same class as the
company’s other shares.
Share-based incentive plans for the
management and key employees valid in 2020
The Group management and key employees participate
in the company’s share-based incentive plans. The earlier
plans are described in detail in the Remuneration Report
of Suominen Corporation, available on the company’s
website www.suominen.fi.
On December 11, 2017 the Board of Directors approved
a share-based incentive plan for the Group management
and key employees. The aim of the plan is to combine
the objectives of the shareholders and the persons
participating in the plan in order to increase the value of
the company in long-term, to build loyalty to the company
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and to oer them competitive reward plans based on
earning and accumulating the company’s shares. The plan
includes three 3-year performance periods, calendar years
2018–2020, 2019–2021 and 2020–2022.
Performance Share Plan performance periods
Period 2018–2020 2019–2021 2020–2022
Incentive based on Total Shareholder Return (TSR)
andEBIT %
Total Shareholder Return (TSR) Total Shareholder Return (TSR)
Potential reward payment Will be paid partly in
Suominenshares and partly
in cash in spring 2021
Will be paid partly in
Suominen shares and partly
in cash in spring 2022
Will be paid partly in
Suominen shares and partly
in cash in spring 2023
Participants 13 people 16 people 18 people
Maximum number of shares 319,000 546,000 756,500
The President & CEO of the company must hold 50% of
the net number of shares given on the basis of the plan,
as long as his or her shareholding in total corresponds
to the value of his or her annual gross salary. A member
of the Executive Team must hold 50% of the net number
of shares given on the basis of the plan, as long as his or
her shareholding in total corresponds to the value of half
of his or her annual gross salary. Such number of shares
must be held as long as the participant’s employment or
service in a group company continues.
Matching Restricted Share Plan 2019–2021
The Board of Directors of Suominen Corporation
approved on June 4, 2019 a Matching Restricted Share
Plan for selected key employees in the Suominen Group.
The prerequisite for receiving a reward from the plan
is that a participant acquires the company’s shares,
amounting to the number resolved by the Board.
If the prerequisites set for a participant have been
fulfilled and his or her employment or service in a
company belonging to the Suominen Group is in force
at the time of the reward payment, he or she will receive
matching shares as a reward.
The plan includes vesting periods, the duration of
which is resolved by the Board. The potential reward will
be paid partly in shares and partly in cash after a vesting
period. The cash proportion is intended to cover taxes
and tax-related costs arising from the rewards to the plan
participants.
The prerequisite for reward payment is that a
participant’s employment or service is in force upon the
reward payment. The plan rewards to be allocated in
2019–2021 will amount to a maximum total of 200,000
Suominen Corporation shares including also the
proportion to be paid in cash.
The first vesting period of the Matching Restricted Share
Plan ended in September and in total 9,352 shares were
transferred to the participants.
Shareholders
At the end of the review period, on December 31, 2020,
Suominen Corporation had in total 6,219 shareholders.
Suominen is not aware of any shareholder agreements
related with the shareholding or use of voting rights.
Detailed information on the management shareholding
and a table presenting the largest shareholders is available
in the notes of this Financial Statement.
Treasury shares
On December 31, 2020, Suominen Corporation held
690,878 treasury shares.
In accordance with the resolution by the Annual General
Meeting, in total 29,121 shares were transferred to the
members of the Board of Directors as their remuneration
payable in shares in May.
In accordance with the matching share-based payment
program, 9,352 shares were transferred to the participants
of the program in September.
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Notifications under Chapter 9, Section 5 of
the Securities Market Act
Suominen Corporation received on October 28, 2020 a
notification referred to in Chapter 9, Section 5 and 6 of
the Securities Market Act. According to the notification,
the shareholding of Varma Mutual Pension Insurance
Company in Suominen Corporation had fallen below the
threshold of 5%.
Suominen Corporation announced on December 29,
2020 a notification referred to in Chapter 9, Section5
and 6 of the Securities Market Act. According to the
notification, Ahlström Capital Oy, as a result of an
intragroup merger in which AC Invest Two B.V. has been
merged into its parent company Ahlstrom Capital B.V.,
Ahlstrom Capital B.V. has therefore as of December28,
2020 become the direct shareholder in Suominen
Corporation. Ahlstrom Capital B.V. is a 100% owned
subsidiary of Ahlström Capital Oy.
Information Pursuant of Ordinance
1020/2012 by Ministry of Finance, not
presented in the consolidated financial
statements
There are neither restrictions of transfer nor redemption
or approval clauses related to the shares of Suominen
Corporation or securities entitling to shares.
Suominen Corporation is not participating in any
arrangements where the financial rights related to a share
or a security entitling to hold a share would have been
separated.
In accordance with the Articles of Association of
Suominen Corporation and the Companies Act, the
Shareholders’ Meeting elects the Board of Directors and
the Chair of the Board of Directors. In accordance with
the Articles of Association, the Board of Directors decides
on the nomination of the President & CEO. The Articles of
Association includes no specific stipulation on altering the
Articles of Association. Shareholders’ Meeting decides on
share issues and acquisition of own shares, in accordance
with the Limited Liability Companies Act.
The members of the Board of Directors have no specific
contracts with the company regarding compensation
in case a member resigns, is dismissed or his/her task
ceases to exist due to a public tender oer. The President
& CEO has no separate contract to be applied if his/her
contract would be terminated due to a public tender oer.
In accordance with the service contract made by the
company and the President & CEO, should the company
terminate the President & CEO’s contract of service,
severance pay corresponding to 12 months’ salary shall be
paid. Other principal terms and conditions of the service
contract of the President & CEO are presented in Note
35 of the consolidated financial statements and in the
Remuneration Report 2020 of Suominen Corporation.
Composition of the Nomination Board
In accordance with the decision taken by the Annual
General Meeting of Suominen Corporation, the
representatives notified by the company’s three
largest shareholders have been elected to Suominen
Corporation’s permanent Nomination Board. In addition,
Chair of the company’s Board of Directors shall serve
as the fourth member. The shareholders entitled to
appoint members to the Nomination Board during
financial year 2020 were determined on the basis of the
registered holdings in the company’s shareholder register
on September 1, 2020 and on September 2, 2019. The
Nomination Board shall submit its proposals to the Board
of Directors no later than February 1 prior to the Annual
General Meeting.
Suominen’s three largest registered shareholders on
the basis of the registered holdings in the company’s
shareholders’ register on September 1, 2020, Ahlstrom
Capital B.V., Oy Etra Invest Ab and Varma Mutual Pension
Insurance Company renominated the following members
to the Shareholders’ Nomination Board:
- Lasse Heinonen, President & CEO of Ahlström Capital
Oy, as a member appointed by Ahlstrom Capital B.V.;
- Erik Malmberg, Investment Advisory Professional, Triton
Advisers AB, as a member appointed by Oy Etra Invest Ab;
- Hanna Kaskela, Director of Responsible Investments,
Varma Mutual Pension Insurance Company
- Jan Johansson, Chair of Suominen’s Board of Directors
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Annual General Meeting
The Annual General Meeting (AGM) of Suominen
Corporation was held on March 19, 2020.
The AGM adopted the Financial Statements and the
Consolidated Financial Statements for the financial
year 2019 and discharged the members of the Board of
Directors and the President & CEO from liability for the
financial year 2019. The AGM approved the Remuneration
Policy for the governing bodies.
The AGM decided, in accordance with the proposal by
the Board of Directors, that a dividend of EUR0.05 per
share will be paid.
The AGM confirmed the remuneration of the Board
of Directors. The Chair will be paid an annual fee of
EUR66,000 and the Deputy Chair and other Board
members an annual fee of EUR31,000. Chair of the Audit
Committee will be paid an additional fee of EUR10,000.
Further, the members of the Board will receive a fee
for each Board and Committee meeting as follows:
EUR500 for each meeting held in the home country of
the respective member, EUR1,000 for each meeting held
elsewhere than in the home country of the respective
member and EUR250 for each meeting held as telephone
conference. 60% of the remuneration is paid in cash and
40% in Suominen Corporation’s shares. Compensation for
expenses is paid in accordance with the company’s valid
travel policy.
The AGM decided that the number of Board members
remains unchanged at six (6). Mr. Jan Johansson was re-
elected as Chair of the Board of Directors and Mr. Andreas
Ahlström, Ms. Sari Pajari-Sederholm and Ms. Laura Raitio
were re-elected as members of the Board. Mr. Björn
Borgman and Ms. Nina Linander were elected as new
members of the Board.
Ernst & Young Oy, Authorised Public Accountant
firm, was re-elected as the auditor of the company for
the next term of oce in accordance with the Articles
of Association. Ernst & Young Oy appointed Mr. Toni
Halonen, Authorised Public Accountant, as the principally
responsible auditor of the company.
The AGM authorized the Board of Directors to decide
on the repurchase of the company’s own shares and to
resolve on the issuance of shares and granting of options
and the issuance of special rights entitling to shares.
Suominen published a stock exchange release on
March 19, 2020 concerning the resolutions of the Annual
General Meeting and the organizing meeting of the Board
of Directors. The stock exchange release and the meeting
materials can be viewed on Suominen’s website at
www.suominen.fi.
In compliance with the resolution of the Annual General
Meeting, on April 3, 2020 Suominen paid out dividends of
EUR2.9 million for 2019, corresponding to EUR0.05 per
share.
Constitutive meeting and permanent committees of
the Board of Directors
In its organizing meeting held after the AGM, the Board
of Directors elected Andreas Ahlström as Deputy Chair of
the Board.
The Board of Directors elected from among its
members the members for the Audit Committee and
Personnel and Remuneration Committee. Nina Linander
was elected as the Chair of the Audit Committee and
Andreas Ahlström and Laura Raitio were re-elected as
members. Jan Johansson was re-elected as the Chair
of the Personnel and Remuneration Committee and Sari
Pajari-Sederholm was re-elected as a member. Björn
Borgman was elected as a new member to the Personnel
and Remuneration Committee.
Suominen published a stock exchange release on
March 19, 2020 concerning the resolutions of the Annual
General Meeting and the organizing meeting of the
Board of Directors. The stock exchange release and an
introduction of the Board members can be viewed on
Suominen’s website at www.suominen.fi.
Changes in the Executive Team
Suominen announced on March 19, 2020, that Ernesto
Levy, Senior Vice President, Americas business area and
a member of Suominen’s Executive Team, had decided
to pursue career opportunities outside the company and
would leave Suominen on April 6, 2020. Lynda Kelly was
nominated to act as the interim SVP, Americas business
area in addition to her role as SVP, Business Development.
On December 11, 2020, Suominen announced that
Lynda Kelly (B.Sc.) has been appointed Senior Vice
President, Americas business area as of January 1, 2021.
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85Suominen Annual Report 2020 | Report by the Board of Directors
Business risks and uncertainties
Manufacturing risks
Suominen has production plants in several European
countries, United States and Brazil. Interruptions at the
plants caused for example by machinery breakdown can
cause production losses and delivery problems. Ongoing
maintenance and investments aiming to extend the
lifetime of the assets are an essential part of ensuring the
operational eciency of the existing production lines.
Suominen’s operations could be disrupted due to
abrupt and unforeseen events beyond the company’s
control, such as power outages or fire and water damage.
Suominen may not be able to control such events through
predictive actions, which could lead to interruptions
in business. Risks of this type are insured in order to
guarantee the continuity of operations. As Suominen has
valid damage and business interruption insurance, it is
expected that the damage would be compensated, and
the financial losses caused by the interruption of business
would be covered.
Suominen uses certain technologies in its production.
In the management’s view, the chosen technologies
are competitive and there is no need to make major
investments in new technologies. However, it cannot be
excluded that the company’s technology choices could
prove wrong, and the development of new or substitute
technologies would then require investments.
Competition
Suominen has numerous regional, national and global
competitors in its dierent product groups. Products
based on new technologies and imports from countries
of lower production costs may reduce Suominen’s
competitive edge. If Suominen is not able to compete
with an attractive product oering, it may lose some of its
market share. Competition may lead to increased pricing
pressure on the company’s products.
Price and availability of raw materials
Suominen purchases significant amounts of pulp- and
oil-based raw materials. Raw materials are the largest cost
item for operations. Changes in the global market prices
of raw materials can have an impact on the company’s
profitability. Suominen’s stocks equal two to four weeks’
consumption and it generally takes two to five months for
raw material price changes to be reflected in Suominen’s
customer pricing either through automatic pricing
mechanisms or negotiated price changes.
Extended interruptions in the supply of Suominen’s
main raw materials could disrupt production and have
a negative impact on the Group’s overall business
operations. As Suominen sources most of its raw materials
from a number of major international suppliers, significant
interruptions in the production of the majority of
Suominen’s products are unlikely.
Market and customer risks
Suominen’s customer base is fairly concentrated, which
increases the potential impact of changes in customer
specific sales volumes. In 2020, the Group’s ten largest
customers accounted for 67% (65%) of the Group net
sales. Long-term contracts are preferred with the largest
customers. In practice the customer relationships are
long-term and last for several years. Customer-related
credit risks are managed in accordance with a credit
policy approved by the Board of Directors. Credit limits
are confirmed for customers on the basis of credit ratings
and customer history.
The demand for Suominen’s products depends on
possible changes in consumer preferences. Historically,
such changes have had mainly a positive impact on
Suominen, as they have resulted in the growing demand
for products made of nonwovens. This was clearly
visible in 2020 as the COVID-19 pandemic increased the
demand for nonwovens for cleaning and disinfecting
wipes. However, certain factors, including consumers’
attitude towards the use of products made even partially
of oil-based raw materials, or their perception on the
sustainability of disposable products in general, might
change the consumers’ buying habits. Suominen
monitors the consumer trends proactively and develops
its product oering accordingly. The company has had
biodegradable, 100% plant-based nonwovens in its
portfolio for over 10 years and hence is well positioned to
respond to changes in customer preferences related to
sustainability and climate change.
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Changes in legislation, political environment
or economic conditions
Suominen’s business and products can be aected
directly or indirectly by political decisions and changes
in government regulations for example in areas such as
environmental policy or waste legislation. An example of
such legislation is the EU’s Single-Use Plastics Directive
that focuses on reducing marine litter. The potential exists
for similar regulations to expand worldwide. This creates
demand for more sustainable products, and Suominen is
well placed to respond to this increasing demand.
Global political developments could have an adverse
eect on Suominen. For instance, a political decision that
constrains the global free trade may significantly impact
the availability and price of certain raw materials, which
would in turn aect Suominen’s business and profitability.
Suominen’s geographical and customer-industry diversity
provide partial protection against this risk.
The relevance of the United States in Suominen’s
business operations increases the significance of the
exchange rate risk related to USD in the Group’s total
exchange risk position. Suominen hedges this foreign
exchange position in accordance with its hedging policy.
The risks that are characteristic to South American
region, including significant changes in political
environment or exchange rates, could have an impact on
Suominen’s operations in Brazil.
Investments
Suominen continuously invests in its manufacturing
facilities. The deployment of the investments may delay
from what was planned, the costs of the investments may
increase from what has been expected or the investments
may create less business benefits than anticipated. The
deployment phase of investments may cause temporary
interruptions in operations.
Cyber and information security
Suominen’s operations are dependent on the integrity,
security and stable operation of its information and
communication systems and software as well as on the
successful management of cyber attack risks. If Suominen’s
information and communication systems and software
were to become unusable or significantly impaired for
an extended period of time, or the cyber attack risks are
realized, Suominen’s reputation as well as ability to deliver
products at the appointed time, order raw materials and
handle inventory could be adversely impacted.
Financial risks
The Group is exposed to several financial risks, such as
foreign exchange, interest rate, counterparty, liquidity
and credit risks. The Group’s financial risks are managed
in line with a policy confirmed by the Board of Directors.
The financial risks are described in the Note 3 of the
consolidated financial statements.
Suominen is subject to corporate income taxes in
numerous jurisdictions. Significant judgment is required
to determine the total amount of corporate income tax at
Group level. There are many transactions and calculations
that leave room for uncertainty as to the final amount of
the income tax. Tax risks relate also to changes in tax rates
or tax legislation or misinterpretations, and materialization
of the risks could result in increased payments or
sanctions by the tax authorities, which in turn could lead
to financial loss. Deferred tax assets included in the state-
ment of financial position require that the deferred tax
assets can be recovered against the future taxable income.
Suominen performs goodwill impairment testing
annually. In impairment testing the recoverable amounts
are determined as the value in use, which comprises of
the discounted projected future cash flows. Actual cash
flows can dier from the discounted projected future
cash flows. Uncertainties related to the projected future
cash flows include, among others, the long economic
useful life of the assets and changes in the forecast sales
prices of Suominen’s products, production costs as well
as discount rates used in testing. Due to the uncertainty
inherent in the future, it is possible that Suominen’s
recoverable amounts will be insucient to cover the
carrying amounts of assets, particularly goodwill. If this
happens, it will be necessary to recognize an impairment
loss, which, when implemented, will weaken the result
and equity. Goodwill impairment testing has been
described in the consolidated financial statements.
Non-financial risks and their management
The assessment of Suominen’s most significant risks also
covers significant non-financial risks. A typical eect
of the realization of a non-financial risk would be a
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87Suominen Annual Report 2020 | Report by the Board of Directors
negative reputation eect. Suominen’s Code of Conduct
guides our all operations. Suominen requires that all
of its employees comply with the Code of Conduct.
Suominen’s suppliers are expected to comply with the
company’s Supplier Code of Conduct, which establishes
the standards for conducting business with Suominen.
Risks related to the environment and climate
change
Environmental risks have been identified as part of the
ISO14001 environmental management system (excl.
Paulinia plant in Brazil), and they are controlled and
managed by each production plant. The most significant
identified environmental risks include binder or chemical
spills and fires at production sites, which may cause harm
to environment. These risks are managed by identifying
and executing mitigation actions to minimize likelihood
and severity of environmental risks.
Suominen could be impacted by risks related to climate
change including weather-related events such as storms,
floods, droughts, fires, hurricanes and other extreme
weather conditions that may damage the company’s
production facilities or disrupt its value chains. Suominen
manages these risks with appropriate precautions,
business continuity plans and insurances. As an example,
risks relating to continuity of raw material supply are
managed by working with multiple international suppliers,
and risks relating to the company’s own manufacturing
facilities are reduced for example by Suominen’s
geographical diversity.
Social and employee-related risks
Suominen’s success is dependent upon the professional
competence and expertise of its management and
personnel, its ability to secure employee commitment,
and success in recruiting skilled people in the future.
Suominen implements and continuously develops
processes and practices that enable us to attract, motivate
and retain talented employees. We work for building and
maintaining a culture of high performance where people
are encouraged to set the bar higher and are able to
perform at their top potential every day.
Occupational safety related risks are managed
through continuous safety work and by ensuring that
work guidelines are followed. To minimize safety risks
Suominen has established Life Saving Rules, which are
mandatory for everyone to comply in any circumstances.
As preventive measure, Suominen has a Behavior Based
Safety (BBS) program in use, which is implemented
through safety walks with the purpose to identify unsafe
and safe behavior or conditions as well as corrective
actions to improve safe working conditions.
Risks related to human rights and corruption
or bribery
Suominen has identified risks related to human rights in
safe working conditions and inappropriate treatment of
employees. Suominen has zero tolerance for any kind of
discrimination. Human rights topics are incorporated into
the Code of Conduct and will also be incorporated in to
supplier audit process.
Suominen does not tolerate corruption or bribery in any
form. As stated in Suominen’s Code of Conduct and Anti-
Corruption Policy, Suominen does not oer, give, solicit,
or accept any improper or corrupt payments or benefits
in return for a favorable decision or improper business
advantage. Suominen expects all service providers,
agents, consultants, and other third parties who act on
its behalf to adhere to the same standards. Suominen has
set up internal and external whistleblower channels for
reporting any suspected non-compliance, and expects all
employees and suppliers to report any violations of the
Code of Conduct or the Supplier Code of Conduct to the
company.
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. In addition, the company operates in the
South American markets. The growth in the demand for
nonwovens has typically exceeded the growth of gross
domestic product by a couple of percentage points.
Looking at the year ahead, we see a twofold
development. The pandemic has increased consumption
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of nonwovens in all our markets and the demand is
expected to continue on a high level. In the long term,
COVID-19 may lead to a sustained increase in the use
of nonwovens for cleaning and disinfection products.
However, the risks related to the pandemic, such as
possible shortages of raw materials, issues linked to
logistics as well as potential closures of customers’ or our
own plants due to virus infections or authority decisions
remain relevant. We have already started to experience
exceptional volatility in the cost and availability of raw
materials and transportation.
Information on the separate financial
statements of the parent company
Key ratios of the parent company
EURthousand
Net sales , , ,
Operating profit/loss , -, -,
% of net sales . -. -.
Net financial expenses , , ,
Profit/loss before appropriations
and income taxes , - ,
Profit/loss for the period , -, ,
Return on invested capital, % . . .
Salaries -, -, -,
Average number of personnel
The separate financial statements of Suominen
Corporation have been prepared according to the Finnish
Accounting Act, the Accounting Decree and other laws
and regulations relating to financial statements (FAS). The
consolidated financial statements of Suominen group
have been prepared in compliance with the International
Financial Reporting Standards (IFRS).
Net sales of Suominen Corporation were EUR27.9
million (22.1) and operating profit EUR5.4 million (-1.4).
Net financial expenses were EUR+4.7 million (+1.2).
Profit/loss for the period was EUR6.6 million (-1.3). There
are no related party loans except loans to other Suominen
group companies.
In the financial year 2020, the parent company had on
average 33 (29) employees and at the end of the year 33
(30) employees.
Outlook
Suominen expects that its comparable EBITDA (earnings
before interest, taxes, depreciation and amortization) in
2021 will be in line with 2020. The demand for nonwovens
is expected to remain strong, however the rising volatility
in the raw material and transportation markets increases
uncertainty and may impact the result negatively. In 2020,
Suominen’s comparable EBITDA was EUR60.9 million.
Proposal by the Board of Directors for
the use of the profit
The profit of the financial year 2020 of Suominen
Corporation, the parent company of Suominen Group,
was EUR6,584,937.34. The funds distributable as
dividends, including the profit for the period, were
EUR12,095,497 and total distributable funds were
EUR93,456,859.
The Board of Directors proposes that a dividend of
EUR0.10 per share shall be distributed for the financial
year 2020 and that the profit shall be transferred to
retained earnings. In addition, the Board of Directors
proposes, that in addition to the dividend, a return of
capital of EUR0.10 per share shall be distributed for
the financial year 2020 from the reserve for invested
unrestricted equity.
On February 3, 2021 the company had 57,568,341
issued shares, excluding treasury shares. With this number
of shares, the total amount of dividends to be distributed
would be EUR5,756,834.10 and the total amount of the
return of capital would be EUR5,756,834.10, in total
EUR11,513,668.20.
There have been no significant changes in the company’s
financial position after the end of the review period.
The record date is March 29, 2021 and the dividend
would be paid on April 8, 2021.
Corporate Governance Statement,
Remuneration Report and Statement
on Non-Financial Information
The Corporate Governance Statement 2020 and
Remu neration Report 2020 of Suominen Corporation
have been disclosed as separate statements at
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89Suominen Annual Report 2020 | Report by the Board of Directors
www.suominen.fi > Investors > Corporate Governance.
Both statements are included also in the company’s
Annual Report 2020.
Suominen’s statement on Non-financial information
as required by Directive 2014/95/EU and the Finnish
Accounting Act is disclosed as part of this Board of
Directors Report.
Events after the reporting period
Suominen Corporation received a notification on January
15, 2021 referred to Chapter 9, Section 5 and 6 of the
Securities Market Act. According to the notification, the
shareholding of companies controlled by Mr. Erkki Etola
in Suominen Corporation has crossed the 15% flagging
threshold.
Suominen Corporation received a notification on
January 18, 2021 referred to Chapter 9, Section 5 and 6
of the Securities Market Act. According to the notification,
the shareholding of Elo Mutual Pension Insurance
Company in Suominen Corporation has fallen under the
5% flagging threshold.
Proposals by the Nomination Board to the
Annual General Meeting 2021 of Suominen
Proposal on the number of the members, on the
composition, and on the Chair of the Board of
Directors
The Nomination Board of Suominen Corporation’s
shareholders proposes to the Annual General Meeting
that the number of Board members remains unchanged
and would be six (6).
The Nomination Board proposes to the Annual General
Meeting that Andreas Ahlström, Björn Borgman, Nina
Linander, Sari Pajari-Sederholm and Laura Raitio would be
re-elected as members of Suominen Corporation’s Board
of Directors.
Out of the current Board members, the Chair of the
Board Jan Johansson has informed that he is not available
as a candidate for the Board of Directors.
In addition, the Nomination Board proposes that Jaakko
Eskola would be elected as a new member of the Board of
Directors.
Mr. Jaakko Eskola (born 1958, M.Sc. (Eng.), Finnish
citizen) currently works as Senior Advisor to the Board
and Executive Team of Wärtsilä Corporation. He has held
a number of senior positions at Wärtsilä since 1998. Mr.
Eskola is the outgoing Chair of the Board at Ahlstrom-
Munksjö Oyj, Deputy Chair of the Board at Varma Mutual
Pension Insurance Company, and a member of the Board
at the Finnish Foundation for Share Promotion.
All candidates have given their consent to the election.
All candidates are independent of the company. The
candidates are also independent of Suominen’s significant
shareholders, with the exception of Andreas Ahlström
who acts currently as Investment Director at Ahlström
Capital Oy. The largest shareholder of Suominen
Corporation, Ahlstrom Capital B.V. is a group company of
Ahlström Capital Oy. The candidate information relevant
considering their service for the Board of Directors is
presented at the company website www.suominen.fi.
The Nomination Board proposes to the Annual General
Meeting that Mr. Jaakko Eskola would be elected as the
Chair of the Board of Directors.
Proposal on the Board remuneration
The Nomination Board of the shareholders of Suominen
Corporation proposes to the Annual General Meeting
that the remuneration of the Board of Directors remains
unchanged and would be as follows: the Chair would be
paid an annual fee of EUR66,000 and the Deputy Chair and
other Board members an annual fee of EUR31,000. The
Nomination Board also proposes that the Chair of the Audit
Committee would be paid an additional fee of EUR10,000.
Further, the Nomination Board proposes that the fees
payable for each Board and Committee meeting would be
as follows: EUR500 for each meeting held in the home
country of the respective member, EUR1,000 for each
meeting held elsewhere than in the home country of
the respective member and EUR500 for each meeting
attended by telephone or other electronic means. No
fee is paid for decisions made without convening a
meeting. In 2020 the fee for meetings held as a telephone
conference was EUR250. Otherwise the meeting fees are
proposed to remain unchanged.
60% of the annual fees is paid in cash and 40% in
Suominen Corporation’s shares. The number of shares
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90 Report by the Board of Directors | Suominen Annual Report 2020
to be transferred will be determined based on the share
value in the stock exchange trading maintained by Nasdaq
Helsinki Ltd, calculated as the trade volume-weighted
average quotation of the share during the one-month
period immediately following the date on which the
interim report of January–March 2021 of the company is
published. The shares will be transferred out of the own
shares held by the company by the decision of the Board
of Directors by May 31, 2021 at the latest.
Compensation for expenses will be paid in accordance
with the company’s valid travel policy.
The composition of the Nomination Board
The members of the Nomination Board are, as of
September 2, 2020, Lasse Heinonen, Managing Director,
Ahlström Capital Oy, nominated by Ahlstrom Capital B.V.,
Erik Malmberg, Investment Advisory Professional, Triton
Advisers AB, nominated by Oy Etra Invest Ab, and Hanna
Kaskela, Director of Responsible Investments, Varma
Mutual Pension Insurance Company, nominated by Varma.
Jan Johansson, Chair of Suominen’s Board of Directors,
serves as the fourth member of the Nomination Board.
Lasse Heinonen acts as the Chair of the Nomination Board.
All of the proposals made by the Nomination Board
were unanimous.
The Board of Directors of Suominen
Corporation resolved on a new share-based
Long-Term Incentive Plan for management and
key employees
The Board of Directors of Suominen Corporation has
resolved on February 3, 2021 on a new share-based
Long-Term Incentive Plan for the management and
key employees. The aim of the new plan is to combine
the objectives of the shareholders and the persons
participating in the plan in order to increase the value of
the company in the long-term, to bind the participants to
the company, and to oer them competitive reward plans
based on earning and accumulating the company’s shares.
Performance Share Plan 2021–2023
The new long-term Performance Share Plan has one
three-year Performance Period, which includes calendar
years 2021–2023. The Performance Share Plan is directed
to approximately 20 people, including the President &
CEO of Suominen.
The Board of Directors resolved that the potential
reward for the Performance Period 2021–2023 will be
based on the Relative Total Shareholder Return (TSR). The
maximum total amount of potential share rewards to be
paid on the basis of the Performance Period 2021–2023 is
approximately 470,000 shares of Suominen Corporation,
representing the gross reward before the deduction of
taxes and tax-related costs arising from the reward.
The Board of Directors will be entitled to reduce the
rewards agreed in the Performance Share Plan if the
limits set by the Board of Directors for the share price are
reached.
Reward payment and ownership obligation for the
management
If the targets of the Plan are reached, rewards will be paid to
participants in spring 2024 after the end of the Performance
Period. The potential rewards from the Performance Period
2021–2023 will be paid partly in the company’s shares and
partly in cash. The cash proportion is intended to cover
taxes and tax-related costs arising from the reward to the
participant. The company also has the right to pay the
reward fully in cash under certain circumstances. As a rule,
no reward will be paid, if a participant’s employment or
service ends before the reward payment.
A member of the Executive Team must hold 50% of
the net number of shares given on the basis of the Plan,
as long as his or her shareholding in total corresponds
to the value of half of his or her annual gross salary. The
President & CEO of the Company must hold 50% of the
net number of shares given on the basis of the Plan, as
long as his or her shareholding in total corresponds to
the value of his or her annual gross salary. Such number
of shares must be held as long as the participant’s
employment or service in a group company continues.
Suominen Corporation
Board of Directors
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91Suominen Annual Report 2020 | Report by the Board of Directors
Consolidated statement of financial position
EUR thousand
CONSOLIDATED FINANCIAL
STATEMENTS (IFRS) 2020
Note
December ,
December ,
ASSETS
Non-current assets
Goodwill 15,496 15,496
Intangible assets 16,748 20,020
Property, plant and equipment 104,666 121,584
Right-of-use assets 17,784 14,319
Loan receivables 3,978 3,650
Equity instruments 768 777
Other non-current receivables 73 70
Deferred tax assets 4,034 2,091
Total non-current assets 163,548 178,007
Current assets
Inventories 35,431 39,257
Trade receivables 51,128 46,728
Loan receivables 3,476 3,845
Other current receivables 5,675 3,820
Assets for current tax 247 701
Cash and cash equivalents 57,877 37,741
Total current assets 153,833 132,093
TOTAL ASSETS 317,381 310,100
Note
December ,
December ,
EQUITY AND LIABILITIES
Equity
Share capital 11,860 11,860
Share premium account 24,681 24,681
Reserve for invested
unrestricted equity 81,361 81,269
Treasury shares -44 -44
Fair value and other reserves -7 264
Exchange dierences -13,933 707
Retained earnings 41,962 13,715
Total equity attributable to
owners of the parent 145,882 132,452
Liabilities
Non-current liabilities
Deferred tax liabilities 13,320 12,786
Liabilities from defined benefit
plans 774 788
Non-current provisions 1,797 1,608
Non-current lease liabilities 14,892 10,464
Other non-current liabilities 17 17
Debenture bonds 82,862 81,714
Total non-current liabilities 113,662 107,375
Current liabilities
Current provisions 250 −
Current lease liabilities 2,539 2,986
Current interest-bearing
liabilities − 14,000
Liabilities for current tax 415 5
Trade payables and other
current liabilities 54,634 53,282
Total current liabilities 57,838 70,273
Total liabilities 171,499 177,648
TOTAL EQUITY AND LIABILITIES 317,381 310,100
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92 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
Consolidated statement
of profit or loss
EUR thousand
Consolidated statement
of comprehensive income
EUR thousand
Restated
Note
January –
December ,
January –
December ,
Net sales 458,893 411,412
Cost of goods sold -389,123 -374,501
Gross profit 69,770 36,911
Other operating income 2,584 2,903
Sales, marketing and
administration expenses -27,946 -27,267
Research and development
expenses -2,767 -3,376
Other operating expenses -2,150 -1,041
Operating profit 39,492 8,129
Net financial expenses -5,582 -5,998
Profit before income taxes 33,910 2,132
Income taxes -3,794 -1,907
Profit for the period 30,116 225
Earnings per share, EUR
Basic 0.52 0.00
Diluted 0.52 0.00
January –
December ,
January –
December ,
Profit for the period 30,116 225
Other comprehensive income:
Other comprehensive income that
will be subsequently reclassified to
profit or loss:
Exchange dierences -15,504 1,570
Reclassified to profit or loss -327 -
Income taxes related to other
comprehensive income 929 -193
Total -14,902 1,377
Other comprehensive income that
will not be subsequently reclassified
to profit or loss:
Fair value changes of equity
instruments -8 −
Remeasurements of defined benefit
plans -10 75
Income taxes related to other
comprehensive income 3 -21
Total -15 54
Total other comprehensive income -14,917 1,431
Total comprehensive income for the
period 15,199 1,656
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93Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
Consolidated statement of changes in equity
EUR thousand
Note
Share
capital
Share
premium
account
Reserve for
invested
unrestricted
equity
Treasury
shares
Exchange
dierences
Fair value
and other
reserves
Retained
earnings
Total equity
attributable to
owners of the
parent
Equity January 1, 2020 11,860 24,681 81,269 -44 707 264 13,715 132,452
Profit for the period − − − − − − 30,116 30,116
Other comprehensive
income − − − − -14,640 -270 -7 -14,917
Total comprehensive
income − − − − -14,640 -270 30,109 15,199
Distribution of dividend − − − − − − -2,876 -2,876
Share-based payments − − − − − − 1,015 1,015
Conveyance of treasury
shares − − 92 − − − − 92
Equity December 31, 2020 11,860 24,681 81,361 -44 -13,933 -7 41,962 145,882
Note
Share
capital
Share
premium
account
Reserve for
invested
unrestricted
equity
Treasury
shares
Exchange
dierences
Fair value
and other
reserves
Retained
earnings
Total equity
attributable to
owners of the
parent
Equity January 1, 2019 11,860 24,681 81,185 -44 -669 264 13,237 130,513
Profit for the period − − − − − − 225 225
Other comprehensive
income − − − − 1,377 − 54 1,431
Total comprehensive
income − − − − 1,377 − 279 1,656
Share-based payments − − − − − − 198 198
Conveyance of treasury
shares − − 84 − − − − 84
Equity December 31, 2019 11,860 24,681 81,269 -44 707 264 13,715 132,452
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Consolidated statement of cash flows
EUR thousand
Note
January –
December ,
January –
December ,
Cash flow from operations
Profit for the period 30,116 225
Total adjustments to profit for the period 34,626 34,585
Cash flow before changes in net working capital 64,742 34,810
Change in net working capital -1,023 1,631
Financial items -4,289 -5,222
Income taxes -2,438 -1,324
Cash flow from operations 56,991 29,894
Cash flow from investments
Investments in property, plant and equipment and intangible assets -10,885 -10,520
Sales proceeds from property, plant and equipment and intangible assets 12 73
Cash flow from investments -10,873 -10,447
Cash flow from financing
Drawdown of current interest-bearing liabilities 15,000 38,000
Repayment of current interest-bearing liabilities -31,968 -47,572
Distribution of dividend -2,876 −
Cash flow from financing -19,845 -9,572
Change in cash and cash equivalents 26,274 9,875
Cash and cash equivalents at the beginning of the period 37,741 27,757
Eect of changes in exchange rates -6,138 109
Change in cash and cash equivalents 26,274 9,875
Cash and cash equivalents at the end of the period 57,877 37,741
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95Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
NOTE1 Significant accounting policies
– consolidated financial statements
Basic information
Suominen Corporation is a public limited liability company
organized under the laws of the Republic of Finland and
domiciled in Helsinki, Finland (Karvaamokuja 2 B, 00380
Helsinki, Finland). Suominen’s shares are publicly traded in
the Nasdaq Helsinki Ltd. (Small Cap, from January 1, 2021
in Mid Cap). Suominen Corporation is the parent company
of the Group. The Group manufactures nonwovens
mainly for consumer goods companies.
The Board of Directors of Suominen Corporation has in
its meeting on February 3, 2021 approved these financial
statements to be published. According to the Finnish
Limited Liability Companies Act, the shareholders have
a possibility to approve or reject or make a decision on
altering the financial statements in a General Meeting to
be held after the publication of the financial statements.
Basis for presentation
The consolidated financial statements of Suominen Group
are prepared in accordance with International Financial
Reporting Standards (IFRS), including International
Accounting Standards (IAS) and Interpretations
issued by the International Financial Reporting
Interpretations Committee (SIC and IFRIC). International
Financial Reporting Standards are standards and their
interpretations adopted in accordance with the procedure
laid down in regulation (EC) No 1606/2002 of the
European Parliament and of the Council. The Notes to
the Financial Statements are also in accordance with the
Finnish Accounting Act and Ordinance and the Finnish
Limited Liability Companies Act.
The consolidated financial statements include the
financial statements of Suominen Corporation and its
subsidiaries. The functional and reporting currency of the
parent is euro, which is also the reporting currency of the
consolidated financial statements. Functional currencies
of subsidiaries are determined by the primary economic
environment in which they operate.
The financial year of Suominen Group as well as of
the parent and subsidiaries is the calendar year ending
December 31.
The financial statements have been prepared under
the historical cost convention except as disclosed in the
accounting policies.
The figures in Suominen’s consolidated financial
statements are mainly presented in EUR thousands. Due
to rounding dierences the figures presented in tables do
not necessarily add up to the totals of the tables.
New accounting standards
New or amended standard, annual improvements or
interpretations applicable from January 1, 2020:
- Definition of Material – Amendments to IAS 1 and IAS8.
According to the amendment, information is material if
omitting, misstating or obscuring it could reasonably be
expected to influence decisions that the primary users
of the financial statements make on the basis of those
financial statements. The amendment has no material
eect on Suominen’s consolidated financial statements.
Other new or amended standard, annual improvements
or interpretations applicable from January 1, 2020 were
not material for Suominen Group.
New and amended IFRS standards and IFRIC
interpretations published but mandatory from
January 1, 2021 or later:
- Interest Rate Benchmark Reform – Phase 2 –
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16,
applicable from January 1, 2021. The amendment has no
eect on Suominen due to the structure of Suominen’s
debt portfolio as well as due to having EURIBOR as the
benchmark interest rate. In addition, at the end of the
reporting period 2020 Suominen was not applying hedge
accounting.
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96 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
- Improvements to IFRS (2018–2020 cycle):
Improvement to IFRS 9 – Fees in the “10 percent” Test
for Derecognition of Financial Liabilities, applicable from
January1,2022. The amendment clarifies the fees that
an entity includes when assessing whether the terms
of a new or modified financial liability are substantially
dierent from the terms of the original financial liability.
The fees include only fees paid or received between the
borrower and the lender.
- Amendments to IAS 37: Onerous Contracts – Costs
of Fulfilling a Contract, applicable from January 1, 2022.
The amendment specifies which costs need to be
included and which cannot be included in the provision
when assessing whether a contract is onerous or loss-
making. The amendment applies a directly related cost
approach, which means that general and administrative
are in most cases excluded from the provisions made of
onerous contracts. The amendments must be applied
prospectively. The amendment does not change the
accounting for onerous contracts in Suominen’s financial
statements.
- Amendments to IAS 1 – Classification of Liabilities as
Current or Non-current, applicable from January 1, 2023.
The amendment specifies the requirements for classifying
liabilities as current or non-current, by clarifying for
example what is meant by a right to defer settlement,
that a right to defer must exist at the end of the reporting
period and that classification is unaected by the
likelihood that an entity will exercise its deferral right. The
amendment will be applied retrospectively.
Other new or amended standards, improvements or
annual improvements applicable from January 1, 2021 or
later are not material for Suominen Group.
Consolidation principles
The consolidated financial statements include the parent
and its subsidiaries. Subsidiaries are companies in which
the parent has, based on its holding, more than half of
the voting rights directly or via its subsidiaries or over
which it otherwise has control. The Group has control
over an entity when it has a participation in the entity and
is exposed to or has right to its variable revenues and can
influence the revenues by using its control over the entity.
Divested subsidiaries are included in the consolidated
financial statements until the control is lost, and
companies acquired during the reporting period are
included from the date when the control has been
transferred to Suominen. Acquisitions of subsidiaries are
accounted for under the acquisition method under which
the purchase consideration is allocated to the acquired
identifiable assets and liabilities assumed, which are
measured at fair value at the acquisition, and the residual
is recognized as goodwill. The transaction costs related to
a business combination are recognized in profit or loss.
All intra-group transactions are eliminated as part of the
consolidation process. Unrealized losses are eliminated
only to the extent that there is no evidence of impairment.
Foreign subsidiaries
In the consolidated financial statements, the statements of
profit or loss, statements of comprehensive income and
statements of cash flows of foreign subsidiaries have been
translated into euros using the average exchange rates
of the reporting period and the statements of financial
positions have been translated using the closing exchange
rates at the end of the reporting period.
The exchange dierence arising from translating the
statements of profit or loss, statements of comprehensive
income and statements of financial position using
the dierent exchange rates is recognized as other
comprehensive income and included in equity as
cumulative exchange dierence. Exchange dierences
arising from the translation of the net investments in
foreign subsidiaries in non-euro area are also recognized
in other comprehensive income and included in equity as
cumulative exchange dierence (Note 15).
On the disposal of all or part of a foreign subsidiary,
the cumulative amount or proportionate share of the
exchange dierence is reclassified from equity to profit or
loss as a reclassification item in the same period in which
the gain or loss on disposal is recognized.
Transactions in foreign currencies
In their own day-to-day accounting the Group companies
translate transactions in foreign currencies into their own
reporting or functional currency at the exchange rates
prevailing on the dates of the transactions. At the end of
the reporting period, the unsettled balances of foreign
currency transactions are measured at the exchange rates
prevailing at the end of the reporting period. Foreign
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97Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
exchange gains and losses arising from trade receivables
are entered as adjustments of net sales and foreign
exchange gains and losses related to trade payables are
recorded as adjustments of costs of goods sold. Foreign
exchange gains and losses arising from financial items are
recorded as financial income and expenses.
Reportable segments
Suominen has no reportable segments.
The business of Suominen consists of one operating
segment, Nonwovens. The net sales of Suominen
consist entirely of net sales of the Nonwovens operating
segment. All the products Suominen produces and sells
are nonwoven products, and the production process
and technology of all the products are mainly similar.
Also other resources, such as production management,
are common to all products. The customers are mainly
converters of nonwovens, and the risks or profitability
related to products or customers do not dier from each
other. Also distribution of the products is similar.
The sales organization of Suominen is organized
geographically as Europe and Americas business areas.
Account management of major customers (“Global
Accounts”) is, however, centralized and independent of
the business areas.
The production facilities of Suominen are managed
centrally, and also the high level supply planning is a
centralized function. The centralized supply planning
optimizes the use of the Group’s production capacity.
The manufacturing of the products is allocated, based on
the technical parameters of the products and available
production capacity, to the production facilities. Also the
allocation of marketing and R&D resources on dierent
products or production technologies is decided centrally.
The chief operating decision maker of Suominen is the
President & CEO, who is assisted by the Executive Team.
The President & CEO makes decisions on allocating the
resources of the Group. However, material items, such as
major investments, as well as items which are required by
governing law to be decided by the Board of Directors,
are presented to the Board for approval.
Entity-wide disclosures are presented in Note 24.
Research and development
Expenditure on research and development is recognized
in profit or loss. Expenditure on product and process
development is not capitalized as no separate assets are
developed in the research and development activities or
future economic benefits arising from the assets cannot
be reliably assessed.
Government grants
Government or other grants are recognized in profit or
loss in the same periods in which the corresponding
expenses are incurred. The grants received are recognized
as osetting items of the expenses incurred. Government
grants received to acquire property, plant and equipment
or other assets are deducted from the acquisition cost of
the assets in question.
Dividends and other distribution of funds
Dividends or other distribution of funds proposed by the
Board of Directors are not recognized in the financial
statements until they have been approved by the
shareholders at the Annual General Meeting.
Audit
Quarterly information as well as interim reports are not
audited.
Other accounting principles
Accounting principles related to assets, liabilities and line
items in the statement of profit or loss are presented in
the disclosure information related to each item.
NOTE2 Critical accounting estimates
and judgements
The preparation of financial statements in conformity
with IFRS requires management to make estimates and
assumptions that aect the reported amounts of assets
and liabilities, the disclosure of contingent assets and
liabilities at the end of the reporting period and the
recognized amounts of revenues and expenses during
the reporting period. Actual results may dier from these
estimates.
The following items include critical accounting
estimates: impairment testing of assets, especially of
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goodwill; estimated fair values of property, plant and
equipment and intangible assets acquired in an acquisition
and their estimated useful lives; useful lives of other
intangible assets and property, plant and equipment;
measurement of inventories and trade and loan
receivables; recognition and measurement of deferred
taxes and estimates of the amount and probability of
provisions.
The carrying amounts of the lease liabilities and right-
of-use assets are aected, among other things, with the
management estimates made of the lease terms and
possible renewals of the lease agreements.
Estimates and judgements are continuously evaluated
and are based on historical experience and other factors,
including expectations of future events, that are believed
to be reasonable under the circumstances.
The COVID-19 pandemic has not materially increased
Suominen’s risk of impairment losses of non-current
assets nor increased customer credit risk.
The management estimates, that the withdrawal
of the United Kingdom from the European Union in
the beginning of 2021 (Brexit) has no material eect
on Suominen, as the export sales to the area in 2020
represented less than 5% of the total net sales. The
customer risk is not expected to grow as the customers in
the area are mainly large international companies.
Critical accounting estimates and judgements are
presented in the disclosure information related to each
item.
NOTE 3 Financial risk management
Suominen is exposed to customary financial risks relating
to its global businesses such as foreign exchange and
interest rate risks, counterparty risk, funding and liquidity
risks and credit risk. The treasury policy approved by
Suominen Corporation’s Board of Directors defines the
authorities, responsibilities and principles to be followed
in the Group. Financial risk management is centralized
within Suominen Group Treasury which acts as an in-
house bank providing financial services for subsidiaries
within the Group. Financial risk management is governed
by the treasury policy. The policy includes principles
and risk limits relating to debt structure, counterparties,
bank relations and interest rate and foreign exchange risk
management.
In accordance with the treasury policy the President
& CEO approves all major funding operations and the
main principles to be followed when hedging financial
risks. The CFO is responsible for ensuring that the policy
is complied throughout the Group, and for individual
financial operations concerning funding, managing
liquidity and financial risks.
Foreign exchange risk
Suominen Group operates internationally and is therefore
exposed to transaction and translation risks arising from
fluctuations in foreign exchange rates which may have an
eect on profit or loss and financial position of the Group.
Transaction risks mainly arise from cash flows generated
by sale of products and purchase of materials used in
production while translation risks arise from converting
the statements of profit or loss and the statements of
financial position of non-euro subsidiaries as well as
other currency-denominated assets and liabilities into the
Group’s functional currency euro. The aim of the Group’s
foreign exchange risk management is to hedge earnings
from operations and to avoid exchange rate volatility in
cash flows, profit or loss and in financial position.
In addition to US dollar, which generates the most
significant currency impact on Suominen, also Brazilian
real aects the Group’s foreign exchange risk.
The foreign exchange transaction exposure comprises
of committed and estimated currency cash flows for
the next 12 months. The transaction risk arises mainly
from the USD transactions in the euro area and in
Brazil and from euro transactions in the USA and Brazil.
The transaction risk related to USD arises both from
operational and financial transactions. The exchange rate
risks are hedged case by case.
Common derivative contracts are used in hedging
to some extent, as their pricing can be verified on the
markets. Suominen does not apply hedge accounting in
currency hedging for the transaction risks. Changes in fair
values of currency hedging instruments are recognized in
profit or loss.
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99Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
The consolidated transaction exposure at the end of the reporting period is presented in the table below:
Transaction exposure Transaction exposure
EUR thousand months’ cash flow
Hedged with
currency forwards months’ cash flow
Hedged with
currency forwards
USD/EUR , -, -, -,
EUR/BRL - − -, −
USD/BRL -, − -, −
Correspondingly, the translation exposure at the end of the reporting period was as follows:
Translation exposure 2020 against EUR
EUR thousand
Internal loan
receivables
Cash and cash
equivalents and
internal interest-
bearing liabilities
External interest-
bearing liabilities
Equity of foreign
subsidiaries
Hedged
with currency
derivatives
Open currency
exposure
BRL − , − , − ,
USD , , − , − ,
Translation exposure 2019 against EUR
EUR thousand
Internal loan
receivables
Cash and cash
equivalents and
internal interest-
bearing liabilities
External interest-
bearing liabilities
Equity of foreign
subsidiaries
Hedged
with currency
derivatives
Open currency
exposure
BRL − , − , − ,
USD , , − , − ,
Internal loan receivables consist of loan receivables
granted by Suominen Corporation to subsidiaries outside
of the euro area (+). The loan receivables from subsidiaries
denominated in USD are in substance equity as the
repayment is not anticipated in foreseeable future. These
loan receivables amounted to USD 57.4 million, equaling
to EUR 46.8 million at the end of the reporting period.
The exchange dierences from these loan receivables
are recognized in exchange dierences in other
comprehensive income as they are in substance exchange
dierences arising from equity. Exchange rate dierences
arising from other internal and external interest-bearing
liabilities are recognized in profit or loss.
Sensitivity analysis of financial instruments
IFRS requires disclosing sensitivity analysis of financial
instruments. In the sensitivity analysis in the table in the
following page, the financial instruments include currency
forward contracts, intra-group currency denominated
loan receivables and intra-group currency denominated
interest-bearing liabilities. Sensitivities of the currency
rates at the end of the reporting period are estimated
based on the actual volatility of the currencies over the
past 12 months. The exchange rate sensitivity is calculated
for the following 12 months by using the rates at the end
of the reporting period. The change in the exchange rate
is the change of the euro rate against the US dollar rate.
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2020
EUR thousand
Currency
strengthens %
A. Eect on
profit after tax
B. Eect on
equity after tax
(excluding A)
Currency
weakens %
A. Eect on
profit after tax
B. Eect on
equity after tax
(excluding A)
USD/EUR − , - − -,
2019
EUR thousand
Currency
strengthens %
A. Eect on
profit after tax
B. Eect on
equity after tax
(excluding A)
Currency
weakens %
A. Eect on
profit after tax
B. Eect on
equity after tax
(excluding A)
USD/EUR − , − -,
Eectiveness and sensitivity analysis of currency
hedging
The management has assessed the eectiveness of
hedging by combining the estimated net cash flows for
12 months in foreign currencies with the compensating
eect of the hedging instruments. The net eect from
the change in exchange rates as described above on
profit after taxes in 2020 is estimated to be EUR + / -
237 thousand (EUR - / + 214 thousand). Sensitivities of
exchange rates at the end of the reporting period are
estimated based on the actual volatility of the currencies
over the past 12 months. The exchange rate sensitivity
is calculated for the following 12 months by using the
currency rates at the end of the reporting period.
2020
EUR thousand
Currency strengthens /
weakens %
Eect on months’
currency cash flow
Eect on hedging
instruments Net eect after tax
USD/EUR + / - / - - / + / -
Interest rate risk
Suominen is exposed to interest rate risk when it funds its
operations with euro or currency denominated debt. The
risk arises from the repricing of floating rate debt and with
the raising of new floating rate debt. A fixed rate debt is
subject to fair value risk. The aim of the interest rate risk
management is to bring predictability to interest expenses
by keeping the duration within the agreed limits with an
optimal mix of fixed and floating rate debt. Suominen’s
loan portfolio can comprise both floating and fixed
interest rate loans. The loans drawn from the revolving
credit facility are floating rate loans. Suominen’s Board
of Directors has determined the interest rate structure of
the loan portfolio and the range in which it can vary. The
average interest duration can vary between 12 and 48
months. At the end of 2020 duration excluding the lease
liabilities was 21 months (28 months in 2019).
At the end of the reporting period the carrying amount
of the Group’s loans with fixed interest rates was EUR
82.9 million (EUR 81.7 million). There were no loans with
floating interest rates at the end of 2020 (2019: EUR 14.0
million). Lease liabilities were EUR 17.4 million (EUR 13.5
million).
The sensitivity of interest rate risk is calculated as the
eect of a 0.5 percentage point shift in the interest rate
curve during one year on floating interest rate loans. At
the end of 2020, Suominen had no floating interest rate
loans.
EUR thousand
Change in interest rate,
percentage points
Eect on profit
after tax
Change in interest rate,
percentage points
Eect on profit
after tax
Floating rate loans − − +/- . -/+
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101Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
At the end of the reporting period the cash and cash
equivalents of the Group were EUR 57.9 million (EUR
37.7 million). Cash and cash equivalents have not been
included in the sensitivity analysis.
Credit risk
The most significant individual credit risks relate to trade
receivables from international companies mainly with high
credit ratings. The credit policy approved by the Board
of Directors governs the principles to be followed when
granting credit to customers and the responsibilities of the
organization in this area. Credit is granted to customers after
a credit approval process has been completed. The credit
exposure of customers is reported at least once a month
to the persons responsible for sales. Expected credit losses
of trade receivables recognized in profit or loss totaled EUR
464 thousand in 2020 (EUR 942 thousand). The ageing
structure of the trade receivables is disclosed in Note 12
to the consolidated financial statements. The maximum
credit risk arising from trade receivables equals the carrying
amount of the trade receivables. The determination of the
credit risk related to trade receivables is disclosed in Note 12.
The vast majority of the customers of Suominen have
during the COVID-19 pandemic experienced increased
demand for their products and thus the customer credit
risks have not materially increased.
The Group has agreed on a supply chain financing
program which covers one fifth of the sales at the end of
the reporting period. In accordance with the supply chain
financing agreement, the Group has transferred the rights
and responsibilities of these receivables to the counterparty
of the agreement.
In addition to trade receivables, Suominen has credit risk
arising from loan receivables granted in 2014 in connection
with the sale of the Flexibles business unit. The collaterals
securing the loan receivables as well determination of the
credit risk related to loan receivables are disclosed in Note
12 of the consolidated financial statements.
The Board of Directors of Suominen has approved a
counterpart list of companies and financial institutions
with good credit ratings. These companies are allowed
counterparts in investment activities and derivative
contracts. The amount which can be invested in a single
counterpart is capped. Liquid funds can be invested
with reputable banks with sucient credit ratings or in
commercial papers oering high liquidity and credit ratings.
The Group’s maximum exposure to credit risk equals
to carrying amount of financial assets at the end of the
reporting period.
Liquidity and refinancing risk
Suominen aims to use dierent sources of funding. With
its house banks Suominen has long and trustworthy
relations and acquires advisory and other services from
them. Refinancing risk is managed by diversifying loan
maturities.
Suominen entered in July 2020 into a new single-
currency syndicated revolving credit facility agreement
ofEUR 100 millionwith a maturity of three years. The
lenders for the facility are Danske Bank A/S,FinlandBranch
and Nordea. The new facility replaced the previous EUR
100 million credit facility from 2017, which had Nordea
Bank AB (publ), Finnish Branch and Svenska Handelsbanken
AB (publ), Branch Operation in Finland as lenders.
The new credit facilility has two one-year extension
options. The new credit facility includes leverage ratio and
gearing as financial covenants. The margin of the facility
will increase or decrease dependent onSuominenmeeting
two sustainability key performance indicators, namely
increase in the sales of sustainable products and reduction
of greenhouse gas emissions.
In addition, Suominen has a EUR 85 million unsecured
bond issued in September 2017, which carries a fixed
annual interest at the rate of 2.50% and matures on
October 3, 2022. The bond is listed on Nasdaq Helsinki Ltd.
The bond issued in 2014 was due in September 2019, and
Suominen repaid the remaining capital, EUR 15.7 million, of
the bond.
The average maturity of the committed facility
agreements was 2.5 years (1.7 years) at the end of the
reporting period. At the end of the reporting period the
unused revolving credit facility was EUR 98 million.
Suominen Group Treasury has established several cash
pooling structures with Group’s house banks in order to
manage the liquidity of the Group.
The maturity of financial liabilities and derivatives is
presented as undiscounted cash flows in the following
table. The table includes both interest payments and
repayments of capital.
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Maturity analysis of financial liabilities 2020
EUR thousand Falling due
Financial liabilities Carrying amount
Contractual
cash flows
Less than
months − months − years − years After years
Debentures , , − , , − −
Lease liabilities , , , , , , ,
Other financial
liabilities − − − −
Trade payables , , , − − −
Total , , , , , , ,
Falling due
Contingent liabilities Total
Less than
months − months − years − years
Guarantees , − − ,
Commitments to leases not yet
commenced − − −
Contractual commitments to acquire
property, plant and equipment , , −
Total , , ,
Maturity analysis of financial liabilities 2019
EUR thousand Falling due
Financial liabilities Carrying amount
Contractual
cash flows
Less than
months − months − years − years After years
Debentures , , − , , , −
Loans from
financial institutions , , , − − − −
Lease liabilities , , , , , , ,
Other financial
liabilities − − − −
Trade payables , , , − − −
Total , , , , , , ,
Maturity analysis of leasing obligations arising from operative leasing contracts is disclosed in Note 26.
Falling due
Derivative
instruments Carrying amount
Contractual
cash flows
Less than
months − months − years − years
Currency forward
contracts
Cash inflows (-) -, -, − − −
Cash outflows (+) , , − − −
Total − − −
Maturity analysis of leasing obligations arising from operative leasing contracts is disclosed in Note 26.
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103Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
NOTE 4 Management of capital
Suominen’s management of capital aims to support
business activities by ensuring the conditions to
operate by means of the Group’s financial position and
capital structure. In addition, the aim is to increase the
shareholder value by targeting at a competitive return
on invested capital. The capital structure must ensure
debt financing of the Group. In the capital management
planning process both current and future needs of the
business are taken into consideration together with
securing the competitive pricing of financing.
The Board of Directors of Suominen monitors the
equity ratio and gearing. Gearing is calculated as the ratio
between interest-bearing net debt to equity. Equity ratio is
calculated as the ratio between equity to the total assets
adjusted with advance payments received.
The capital structure can be influenced by distributing
dividends or other funds and share issues. If there is a
need, the Group can buy back own shares or issue new
shares as authorized by the general meetings, or decide to
sell assets or businesses to reduce liabilities.
At the end of 2020, the Group’s equity ratio was 46.0%
(42.7%) and gearing was 25.4% (50.7%).
Suominen has as a selected supplier -status a Supply
Chain Financing program with certain customers. Under
the program the trade receivables are sold on a non-
recourse basis. The program releases capital employed.
Equity ratio and gearing at the end of the reporting period
EUR million
Nominal value of interest-bearing liabilities . .
Interest-bearing receivables -. -.
Cash and cash equivalents -. -.
Interest-bearing net debt . .
Total equity attributable to owners of the parent . .
Assets total - advances received . .
Gearing, % . .
Equity ratio, % . .
Reference
Note 17
Note 12
Consolidated statement of financial position
The funding is managed by maintaining good relations
with the financial institutions. The cooperation with the
banks is built on long-lasting relationships.
Suominen plans to cover the loan amortization needs
with its cash flow from operations and if needed, by
disposal of non-core assets.
The Group’s loan agreements include covenant terms
which are linked to consolidated key figures. The credit
facility includes leverage ratio and gearing as financial
covenants. If the covenant terms are not fulfilled,
negotiations with the lenders will be initiated.
Interest-bearing liabilities of Suominen are presented in
Note 17 of the consolidated financial statements.
Maturity analysis of financial liabilities 2019
EUR thousand Falling due
Contingent liabilities Total
Less than
months − months − years − years
Guarantees , , − ,
Commitments to leases not yet
commenced − − −
Total , , − ,
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NOTE 5 Goodwill
EUR thousand
Impairment testing of goodwill
In impairment testing the recoverable amount for the cash
generating unit is determined as the value in use. Value in
use comprises the discounted projected future cash flows.
Projected cash flows are based on actual performance,
annual plans as well as five-year forecasts based on the
Group’s strategy. The main assumptions of forecasts are
always reviewed during the impairment testing. Cash
flows in the period beyond the five-year forecasted period
are extrapolated using the growth rates for Suominen’s
business. The key assumptions used in the value in use are
sales trend of the cash-generating unit, the profitability of
the business, expense levels and the discount rate used.
The replacement investments needed for maintaining
the existing production capacity have been estimated
based on the planned depreciation during the useful lives
of each asset in the cash-generating unit. Replacement
investments include also renewals of lease contracts.
On January 8, 2020, Suominen announced of its
strategy covering five years. In accordance with the
strategy, Suominen aims to grow by creating innovative
and more sustainable nonwovens for the customers
and aims to improve profitability through more ecient
operations and a high performance culture. The main
focus is on wipes.
The annual growth rate for Suominen’s net sales
during the period covered by the forecast (2021−2025)
has been estimated at 1.8%. The estimated growth rate
has decreased from the previous year as the financial
performance Suominen has improved significantly in
2020 due to the increase in demand for wiping products
caused by the COVID-19 pandemic. Based on the market
research information and comments and investment plans
of Suominen’s customers, the high demand is expected to
continue also going forward.
The discount rate has been derived by using targeted
capital structure at the time of the impairment test.
Gearing, or ratio of net debt to equity, is 60%. The lease
liabilities in the statement of financial position have been
taken into account in the calculation of the discount
rate. Cost of capital has been calculated as a weighted
average pre-tax rate for equity and debt and taking into
The critical assumptions in impairment testing
Pre-tax discount rate .% .%
Growth in net sales 2021−2025
(2020−2024) .% .%
Annual terminal growth rate .% .%
Annual terminal operating profit
percentage .% .%
Accounting principles
Goodwill represents the excess of the purchase
consideration over the fair value of acquired net assets.
Goodwill is allocated to those cash generating units
which benefit from the acquired net assets as well as
from synergies arising from the acquisition. The carrying
amount of goodwill is tested at least annually for
impairment. If the impairment testing indicates, that the
recoverable amount of the cash generating unit which
includes goodwill is lower than its carrying amount,
an impairment loss of goodwill and of other assets, if
applicable, is recognized in the statement of profit or
the consideration the risk-free rate and risk margins of
equity and debt respectively. The components of the
cost of capital are revised annually. Discount rate used in
the calculation is the weighted average of the risk-free
10-year government bond rates in the countries where
Suominen operates.
Impairment testing is based on present estimates
of future development at the time of the impairment
testing. The uncertainty in measuring the values in use is
captured by analyzing variations in the amount or timing
of cash flows. The element of uncertainty and risk has
been accounted for in the discount rates and by taking
into consideration the experience from the previous
impairment tests.
When performing impairment testing, not only the
carrying amount of goodwill is included in the tested
carrying amount but also the carrying amount of
property, plant and equipment and right-of-use assets as
well as net working capital. If the pre-tax discount rate
would increase by 11.1 percentage points or the annual
terminal operating profit percentage would decrease by
6.45 percentage points, the recoverable amount would
equal the carrying amount.
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105Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
loss. The impairment loss of goodwill will not be reversed
during subsequent reporting periods.
At the end of the reporting period, the carrying amount
of goodwill was EUR 15,495 thousand (EUR 15,495
thousand in 2019). The Group has one operating segment
(Nonwovens), which is also a cash generating unit to
which goodwill has been allocated in its entirety.
Critical accounting estimates and judgements
Goodwill is tested annually for possible impairment.
The recoverable amounts have been determined based
on the assets’ value in use which require the use of
estimates. The actual cash flows can dier from estimated
discounted future cash flows. Uncertainties related to the
projected future cash flows include, among others, the
long economic useful lives of the assets, the estimated
sales prices, production costs and changes in discount
rate used in testing.
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106 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
Intangible
rights Goodwill
Other
intangible
assets
Advance
payments and
assets under
construction Total
Acquisition cost January 1 , , , ,
Exchange dierence - − - − -
Additions − −
Decreases and disposals - − - − -
Reclassifications − − - −
Acquisition cost December 31 , , , ,
Accumulated amortization and impairment losses January 1 -, − -, - -,
Exchange dierence − −
Amortization for the reporting period -, − - − -,
Decreases and disposals − −
Accumulated amortization and impairment losses December 31 -, − -, - -,
Carrying amount December 31 , , , − ,
Intangible
rights Goodwill
Other
intangible
assets
Advance
payments and
assets under
construction Total
Acquisition cost January 1 , , , , ,
Exchange dierence - −
Additions − , ,
Decreases and disposals -, − - − -,
Reclassifications , − -,
Acquisition cost December 31 , , , ,
Accumulated amortization and impairment losses January 1 -, − -, - -,
Exchange dierence − - − -
Amortization for the reporting period -, − - − -,
Decreases and disposals , − − ,
Reclassifications − − −
Accumulated amortization and impairment losses December 31 -, − -, - -,
Carrying amount December 31 , , , ,
NOTE 6 Intangible assets
EUR thousand
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107Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
In 2011, EUR 5,979 thousand of the purchase
consideration related to the acquisition of Ahlstrom’s
Home and Personal business was allocated to customer
relations. At the end of the reporting period, the carrying
amount of these customer relations was EUR 1,763
thousand.
Accounting principles
Intangible rights include patents, trademarks, software
licences as well as customer relations which were
identifiable assets at the business combination and are
measured at fair value at the acquisition date. Other
intangible assets are development and other costs
which are directly attributable to the design and testing
of identifiable and unique software or similar intangible
assets. If an intangible asset is a qualifying asset as defined
in IAS 23, i.e. an asset that necessarily takes a substantial
period of time to get ready, the borrowing costs are
capitalized into the initial acquisition cost of the asset.
Subsequent expenditure on intangible assets is
capitalized only if the future economic benefits from the
asset exceed the initially planned level. Otherwise the
expenditure is recognized as an expense in the statement
of profit or loss.
Intangible rights and other intangible assets are
recognized in the statement of financial position at
their initial acquisition cost less cumulative amortization
and impairment losses, if any. They are amortized
using planned straight-line amortization during of their
estimated useful lives. Intangible assets from acquisition
of a subsidiary are stated at their fair values at the date of
the acquisition.
Suominen has no other intangible assets than goodwill
which have indefinite useful life. Goodwill and intangible
assets not yet available for use are tested annually
for impairment. Disclosure information of goodwill
is presented in Note 5 of the consolidated financial
statements.
Other intangible assets are tested for impairment if
there are indications that the asset may be impaired.
Impairment testing is described in Note 29 of the
consolidated financial statements.
Amortization periods for intangible assets
Goodwill no amortization
Intangible rights 3–13 years
Customer relations 13 years
Other intangible assets 5–10 years
Advance payments and
assets under construction no amortization
Critical accounting estimates and judgements
If there is indication of impairment, the carrying amounts
of intangible assets are compared with their recoverable
amounts. The recoverable amount is the higher of fair
value and value in use. Value in use is calculated by
discounting the future cash flows arising from the the
asset. If the recoverable amount of an asset is lower than
the carrying amount, an impairment loss is recognized.
Both the amounts and timing of the cash flows are based
on management estimates.
Useful lives of intangible assets are based on
management’s best estimate of the period the asset is
expected to be available for use by Suominen. The actual
useful life can, however, dier from the expected useful
life resulting in adjustment of annual amortization of the
asset or in recognizing of an impairment loss.
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NOTE 7 Property, plant and equipment
EUR thousand
Land
Buildings
and
constructions
Machinery
and
equipment
Other
tangible
assets
Advance
payments and
assets under
construction Total
Acquisition cost January 1 , , , , , ,
Exchange dierence - -, -, - -,
Additions − − − − , ,
Capitalized borrowing costs − − − −
Decreases and disposals − − -, − − -,
Reclassifications - , -, −
Acquisition cost December 31 , , , , , ,
Accumulated depreciation and impairment
losses January 1 − -, -, - - -,
Exchange dierence − , , ,
Decreases and disposals − − , − − ,
Depreciation for the reporting period − -, -, - − -,
Accumulated depreciation and impairment
losses December 31 − -, -, - - -,
Carrying amount December 31 , , , , ,
Land
Buildings
and
constructions
Machinery
and
equipment
Other
tangible
assets
Advance
payments and
assets under
construction Total
Acquisition cost January 1 , , , , , ,
Application of IFRS 16 − − - − − -
Exchange dierence - , ,
Additions − − , ,
Capitalized borrowing costs − − − −
Decreases and disposals − - -, - − -,
Reclassifications − , -, -
Acquisition cost December 31 , , , , , ,
Accumulated depreciation and impairment
losses January 1 − -, -, - - -,
Application of IFRS 16 − − − −
Exchange dierence − - -, - -,
Decreases and disposals − , − ,
Depreciation for the reporting period − -, -, - − -,
Reclassifications − - −
Accumulated depreciation and impairment
losses December 31 − -, -, - - -,
Carrying amount December 31 , , , , ,
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Carrying amount of production machinery
and equipment , ,
Contractual commitments to acquire property, plant and
equipment are presented in Note36.
Accounting principles
Property, plant and equipment consist mainly of land,
buildings and structures as well as of machinery and
equipment. They are recognized in the statement of
financial position at their acquisition cost less cumulative
depreciation and impairment losses, if any. When an asset
consists of major components with dierent useful lives,
they are accounted for as separate items. Assets from
acquisition of a subsidiary are stated at their fair values at
the date of the acquisition.
When part of an asset in property, plant and equipment
is replaced, the cost of the replacement is capitalized and
the eventual remaining carrying amount of the replaced
asset is derecognized. Other subsequent expenditure
is capitalized only if the future economic benefits to
the company from the asset are enhanced. Ordinary
maintenance and repair charges are expensed as incurred.
Borrowing costs are capitalized as part of the acquisition
cost of property, plant and equipment if the assets are
qualifying assets as defined in IAS 23 Borrowing Costs.
Depreciation is recognized on a straight-line basis over
expected useful lives. Depreciation begins when the asset
is available for its intended use. Land is not depreciated
since it is deemed to have indefinite useful life.
Gains and losses from the sales and disposals of
property, plant and equipment are determined as a
dierence between the sales price and the carrying
amount of the asset and they are recognized as other
operating income or expenses.
Depreciation periods for property,
plant and equipment
Land no depreciation
Buildings and constructions 10–40 years
Machinery and equipment 4–20 years
Other tangible assets 3–5 years
Advance payments and
assets under construction no depreciation
Critical accounting estimates and judgements
If there is indication of impairment, the carrying amounts
of property, plant and equipment are compared with
their recoverable amounts. The recoverable amount is
the higher of fair value and value in use. Value in use is
calculated by discounting the future cash flows arising
from the the asset. If the recoverable amount of an asset
is lower than the carrying amount, an impairment loss
is recognized. Both the amounts and timing of the cash
flows are based on management estimates.
Useful lives of property, plant and equipment are based
on management’s best estimate of the period the asset is
expected to be available for use by Suominen. The actual
useful life can, however, dier from the expected useful
life resulting in adjustment of annual depreciation of the
asset or in recognizing of an impairment loss.
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NOTE 8 Right-of-use assets
EUR thousand
Right-of-use
land
Right-of-use
buildings
Right-of-use
machinery and
equipment
Right-of-use
oce spaces
Other right-of-
use assets Total
Acquisition cost January 1 , , , − ,
Exchange dierence − - - - − -
Additions , ,
Decreases − - - − − -
Acquisition cost December 31 , , , ,
Accumulated depreciation and
impairment losses January 1 - -, - - − -,
Exchange dierence −
Decreases − − − −
Depreciation for the reporting period - -, - - - -,
Accumulated depreciation and
impairment losses December 31 - -, -, - - -,
Carrying amount December 31 , , ,
Right-of-use
land
Right-of-use
buildings
Right-of-use
machinery and
equipment
Right-of-use
oce spaces
Other right-of-
use assets Total
Acquisition cost January 1 , , ,
Exchange dierence − −
Additions − −
Decreases - - - - - -
Acquisition cost December 31 , , , − ,
Accumulated depreciation and
impairment losses January 1 − − - − − -
Exchange dierence − −
Decreases − − −
Depreciation for the reporting period - -, - - - -,
Accumulated depreciation and
impairment losses December 31 - -, - - − -,
Carrying amount December 31 , , − ,
Suominen owns the majority of its production facilities
(ie. buildings and land) as well as all of its production lines.
The most significant lease contracts Suominen has consist
of the leased production facilities in Italy and Windsor
Locks, USA. In addition, part of the production facility in
Spain is leased. Other lease contracts are mainly lease
contracts of oces, smaller machinery and equipment,
such as forklifts and oce equipment, as well as leases of
vehicles.
Lease contracts are disclosed in Note 26.
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NOTE 10 Inventories
EUR thousand
Inventories
Raw materials and consumables , ,
Work in progress , ,
Finished goods , ,
Advance payments for inventory
Total inventories , ,
Write-down of inventory -, -,
Reversals of write-down of inventory ,
Inventories recognized as expense during the period -, -,
Company Domicile Ownership, %
Owned by
parent company
Suominen Corporation Helsinki, Finland
Suominen Nonwovens Ltd. Nakkila, Finland % x
Mozzate Nonwovens S.r.l. Mozzate, Italy % x
Cressa Nonwovens S.r.l. Mozzate, Italy %
Alicante Nonwovens S.A.U. Alicante, Spain % x
Suominen US Holding, Inc. Delaware, USA % x
Bethune Nonwovens, Inc. Bethune, South Carolina, USA %
Green Bay Nonwovens, Inc. Green Bay, Wisconsin, USA %
Windsor Locks Nonwovens, Inc. Windsor Locks, Connecticut, USA %
Suominen Brasil Indústria e Comercio de Não-Tecidos Ltda. Paulínia, Brazil % x
NOTE 9 Group companies
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Accounting principles
Cost of inventories is measured using the FIFO (first-in-
first-out) principle or weighted average cost. The value of
inventory includes all direct and indirect costs associated
with purchase. The cost of manufactured products
includes the cost of materials, direct labour and other
direct costs, including general manufacturing overheads.
The cost of inventories excludes sales, administration and
financing costs. Borrowing costs are not capitalized in
inventory.
Inventories are valued at the lower of cost and the
probable net realizable value. Net realizable value is the
estimated selling price in the ordinary course of business
less the estimated costs of completion and estimated
costs necessary to make the sale.
Obsolete items in inventories are written down.
Inventories recognized as expense during the period are
included in cost of goods sold in the statement of profit or
loss.
Critical accounting estimates and judgements
Measurement of inventories includes some management
estimates. Inventories are measured at lower of cost and
net realizable value. Net realizable value is used in testing
the recoverable amount of inventories in order to avoid
the inventories being carried in excess of the amount
expected to be realized from their sale or use.
NOTE 11 Equity instruments
EUR thousand
At fair value through
profit or loss
Designated at fair value through
other comprehensive income Total
Carrying amount January 1
Change in fair value − - -
Carrying amount December 31
At fair value through
profit or loss
Designated at fair value through
other comprehensive income Total
Carrying amount January 1
Carrying amount December 31
Accounting principles
For investments in equity instruments, ie. shares, IFRS9
enables the entity to make an irrevocable election of
classification and measurement by equity instrument.
Suominen classifies some of the investments in equity
instruments at fair value through profit or loss. With the
classification both the fair value changes and possible
gains and losses on disposal are recognized in profit or
loss. Some equity instruments are classified at fair value
through other comprehensive income, and both the
fair value changes and the possible gains and losses on
disposal are recognized in other comprehensive income
without subsequent recycling to profit or loss.
Equity instruments consist of unlisted shares. At the
disposal of its Flexibles business unit Suominen acquired
shares in Bright Maze Oy. The ownership represents 19.9%
of shares and votes in Bright Maze Oy. Shares in Bright
Maze Oy are measured at fair value through profit or loss.
Other equity instruments are designated to be
measured at fair value through other comprehensive
income as they are not material items in the consolidated
financial statements of Suominen.
If there is no active market for the equity instruiment
or if the securities are not listed, the Group measures
fair value with valuation techniques. If there is no asset-
specific data available from transactions between
independent parties, the fair values used for the asset is
for example the present value of discounted cash flows
arising from the asset or fair values other instruments
which are substantially identical than the asset.
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NOTE 12 Receivables
EUR thousand
Non-current receivables
Loan receivables , ,
Other non-current receivables
Total non-current receivables , ,
Current receivables
Trade receivables , ,
Loan receivables , ,
Other current receivables , ,
Prepaid expenses and accrued income , ,
Total current receivables , ,
Ageing analysis of trade receivables and credit risk exposure
Trade receivables December 31, 2020
Past due
Current < days – days – days > days Total past due Total
Trade receivables , , , , , ,
Allowance for expected credit losses − − - - -, -, -,
Carrying amount of
trade receivables , , , - , ,
Trade receivables December 31, 2019
Past due
Current < days – days – days > days Total past due Total
Trade receivables , , , , , , ,
Allowance for expected credit losses − − - -, -, -,
Carrying amount of
trade receivables , , , , , ,
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Expected credit losses of trade receivables and changes in
the allowance for expected credit losses of trade receivables
Allowance for expected credit losses
January 1 -, -,
Exchange dierence -
Realized −
Reversed
Charge for the year - -
Allowance for expected credit
lossesDecember 31 -, -,
Expected credit losses of trade receivables
recognized during the period, net - -
Currency analysis of trade receivables
EUR , ,
USD , ,
BRL , ,
Other currencies
Total , ,
Prepaid expenses and accrued income consist mainly
of accruals of financial items and other accruals related
to expenses. Other receivables, both non-current and
current, include, among others, receivables related to
indirect taxes.
Prepaid expenses and accrued income related to
derivative instruments are disclosed in more detail in Note
19 of the consolidated financial statements.
Credit quality of other receivables is based on the
debtors’ payment history. Other receivables are not
past due nor impaired. The carrying amount of other
receivables equals the maximum exposure to credit risk.
Suominen has with a “selected supplier” status a Supply
Chain Financing Program with certain customers. In
accordance with the program, trade receivables are sold
so that the contractual rights to receive the cash flows
from the trade receivables cease.
Loan receivables
At the disposal of the Flexibles business in 2014 Suominen
Corporation granted two loans to Bright Maze Oy, the
acquiree: Vendor Loan Note and Subordinated Loan
Note. The accrued interests of both loans are capitalized
annually in December.
The interest rate of the Vendor Loan Note was initially
6% p.a. The loan matured on December 31, 2018. Due
to the default in repayment of the loan, the interest
rate of the loan has increased. The security for the loan
includes some receivables of Bright Maze Oy, shares in
Amerplast Oy as well as a mortgage over Bright Maze Oy.
Suominen has a second priority pledge of the security.
As the credit risk related to the loan receivable has
increased, Suominen has recognized impairment loss of
the receivable.
The interest rate ot the Subordinated Loan Note is 9%
p.a. and it will be fully repaid at its maturity on July 31,
2024. The Subordinated Loan is not secured and it is the
last in the ranking order. Prior to the maturity, Suominen
has the right to convert the loan into equity at its sole
discretion.
Should the ownership structure of Bright Maze Group
change materially, both loan receivables with the accrued
and capitalized interest will be repaid prematurely. The
debtor may repay the loans at any time.
Accounting principles
Loan receivables
Each loan receivable is individually analyzed for credit risk
and a possible impairment loss. These analyses are based
on the financial position, late payments as well as future
cash flows of the debtor. Debtors have no external credit
rating.
Vendor Loan Note is a financial asset at fair value
through profit or loss, as it includes terms which are not
basic terms for loan receivables. For this loan receivable
the expected credit risk is taken into account when
determining the fair value of the receivable. Credit risk is
evaluated based on lifetime expected credit losses as due
to defaults in payments in accordance with the payment
plan the credit risk has increased significantly since initial
recognition. Impairment losses arising from increased
credit risk are recognized in financial expenses (Note 30).
The Subordinated Loan Note is measured at amortized
cost, as its contractual cash flows consist solely of
payments of principal and interest, and Suominen’s aim
is to hold the receivable until maturity in order to collect
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the contractual cash flows. For this loan receivable the
credit risk and impairment losses are estimated based on
12-month expected credit losses, or if there has been an
increase in the credit risk related to the receivable, based
on lifetime expected credit losses.
Trade receivables
Trade receivables are measured under IFRS 9 at amortized
cost. The value of trade receivables depends on the
transaction price of sold goods. Transaction price is
measured in accordance with IFRS 15 Revenue from
Contracts with Customers. In defining the transaction
price, for example the variable considerations included
in the contracts, such as volume rebates, are taken into
account. This means that the transaction price can be
lower than the sales amount invoiced from the customer.
Suominen applies the practical expedient allowed by
IFRS 9 for credit losses arising from trade receivables and
uses a provision matrix in estimating the credit losses
based on historical experience on realized credit losses.
In accordance with the provision matrix, the credit losses
of trade receivables are based on lifetime expected credit
losses. Trade receivables are categorized based on days
past due as well as on risk characteristics of the customers
taking into account the customers’ capability to pay all
contractual amounts as agreed in the contracts. Risk
characteristics include, among others, the geographical
risk related to the customer, the payment behavior and
the financial position of the customer.
The expected credit losses on trade receivables are a
probability-weighted estimate of credit losses over the
expected life. Suominen’s realized credit losses have
historically been immaterial. There is, however, a risk that
some bad debt provisions made in 2020 and 2019 will
be realized credit losses due to the customers’ financial
diculties.
A large part of the trade receivables were at the end
of the reporting period from international customers
with high credit rating. These customers are capable
to pay their overdue receivables and the credit risk is
not considered to be significantly increased even if the
receivables were overdue for more than 30 days.
If it has been estimated that the credit risk of other
overdue trade receivables has significantly increased,
expected credit losses have been recognized. In addition,
the overdue trade receivables are under collection
procedures or payment plans with the customers have
been made. Suominen also monitors continuously that
payment plans are followed.
Suominen monitors constantly the open balances of
the customers and takes action if payments are delayed.
The COVID-19 pandemic has increased the credit risk of
certain customers depending on the markets in which
they operate, but as a whole, also the customers have
experienced increased demand of their products and
thus their credit risks and Suominen’s expected credit
losses arising from trade receivables have not materially
increased.
Critical accounting estimates and judgements
Measurement of trade and loan receivables includes some
management estimates. If the management estimates that
the carrying amount of a trade or loan receivable exceeds
its fair value, an impairment loss is recognized. Estimates
and judgements are used also in defining the expected
credit losses.
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NOTE 13 Financial assets
EUR thousand
Classification of financial assets
At fair value through
profit or loss At amortized cost
Designated
at fair value
through other
comprehensive
income Carrying amount Fair value
Equity instruments −
Loan receivables , , − , ,
Trade receivables − , − , ,
Interest and other financial receivables − −
Derivative receivables − −
Cash and cash equivalents − , − , ,
Total December 31, 2020 , , , ,
At fair value through
profit or loss At amortized cost
Designated
at fair value
through other
comprehensive
income Carrying amount Fair value
Equity instruments −
Loan receivables , , − , ,
Trade receivables − , − , ,
Interest and other financial receivables − −
Cash and cash equivalents − , − , ,
Total December 31, 2019 , , , ,
Accounting principles
Suominen has defined its business model for managing
financial assets and based on the model as well as the
characteristics of the financial assets, determined the
classification of the financial assets.
Trade day accounting is applied to regular purchases
and sales of financial assets. Financial assets are
derecognized when the rights to receive cash flows from
the assets have expired or have been transferred to an
external party and the Group has transferred substantially
all the risks and rewards related to the ownership of the
assets to an external party.
Financial assets at fair value through profit or loss
Certain loan receivables are under IFRS 9 financial assets
at fair value through profit or loss, as they, among other
things, include terms which are not basic terms for loan
receivables. Loan receivables at fair value through profit or
loss are described in Note 12.
Financial assets at fair value through profit or loss
include equity instruments. More information is presented
in Note 11.
Derivative instruments, for which hedge accounting
is not applied, are recognized under IFRS 9 at fair value
through profit or loss. Disclosure information on derivative
instruments is presented in Note 19.
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Gains or losses arising from changes in the fair value of
assets at fair value through profit or loss are recognized
in the statement of profit or loss either in other operative
income and expenses or in financial items, depending on
the nature of the asset.
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other comprehensive
income include equity instruments. More information is
presented in Note 11.
Financial assets at amortized cost
Loan and trade receivables at amortized cost are
described in Note 12.
Cash and cash equivalents are measured under IFRS9
at amortized cost. Under IFRS 9 also cash and cash
equivalents are subject to credit loss assessment, and
credit losses are recognized based on either 12-month
expected credit losses, or if there has been a significant
increase in the credit risk related to the receivable, based
on lifetime expected credit losses. Based on the situation
at the end of the reporting period and taking into account
the counterparty credit risk related to deposits in banks,
there are no credit losses from cash and cash equivalents.
Cash and cash equivalents comprise cash. If bank
overdrafts are in use, they are included in current interest-
bearing liabilities.
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NOTE 14 Fair value hierarchy
EUR thousand
Fair value hierarchy in 2020
Financial assets at fair value Level Level Level
Equity instruments − −
Loan receivables − − ,
Currency derivatives − −
Total in 2019 − ,
Financial liabilities at fair value Level Level Level
Currency derivatives − −
Total in 2020 − −
Fair value hierarchy in 2019
Financial assets at fair value Level Level Level
Equity instruments − −
Loan receivables − − ,
Total in 2019 − − ,
Fair value changes in Level 3
Financial assets at fair value
Total January 1, 2019 ,
Recognized in profit or loss
Interest income
Impairment loss -
Total December 31, 2019 ,
Recognized in profit or loss
Interest income
Impairment loss -
Recognized in other comprehensive income
Impairment loss -
Total December 31, 2020 ,
At the end of reporting period 2019 Suominen had no
financial liabilities at fair value.
Items recognized in profit or loss have been recognized in
financial items.
There were no transfers in the fair value measurement
hierachy levels during the reporting periods.
Fair values in Level 1 are based on quoted prices
(unadjusted) in active markets for identifical assets or
liabilities.
The fair value for financial instruments that are not
traded in an active market is determined by using
valuation techniques. These valuation techniques
maximize the use of observable market data where it is
applicable and rely as little as possible on entity specific
estimates. If all significant inputs required to measure the
fair value of an instrument are observable, the instrument
is included in Level 2.
Fair values for currency forward contracts are
determined by using the spot rates and relevant swap
points based on interest rate dierences at the end of the
reporting period.
The fair values of financial instruments on Level 3
are based on related inputs, which are not based on
observable market information but significantly on
management estimates which are used in generally
accepted valuation methods.
The fair value of the shares in Bright Maze Oy on Level 3
is measured using an EBITDA multiplier and a comparable
data analysis. If there is no asset-specific data available
from transactions between independent parties, the
fair values used for the equity instrument is for example
the present value of discounted cash flows arising from
the asset or fair values other instruments which are
substantially identical than the asset.
The fair value of the loan receivables on Level 3 is
measured by deducting the lifetime expected credit losses
from the loan receivable.
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NOTE 15 Other comprehensive income
EUR thousand
2020 Exchange dierences
Fair value and
other reserves Retained earnings Total
Profit for the period − − , ,
Exchange dierences -, − − -,
Income tax on exchange dierences − −
Reclassified to profit or loss − - − -
Reclassified to profit or loss, income tax − −
Fair value changes of equity instruments − - − -
Defined benefit plans, remeasurements − − - -
Defined benefit plans, remeasurement,
income taxes − −
Total comprehensive income -, - , ,
2019 Exchange dierences
Fair value and
other reserves Retained earnings Total
Profit for the period − −
Exchange dierences , − − ,
Income tax on exchange dierences - − − -
Defined benefit plans, remeasurements − −
Defined benefit plans, remeasurement,
income taxes − − - -
Total comprehensive income , − ,
Accounting principles – exchange dierences
The exchange dierences arising from translating the
statements of profit or loss, statements of comprehensive
income and statements of financial position into euro
using the dierent exchange rates are recognized as
other comprehensive income and included in equity as
cumulative exchange dierence. Exchange dierences
arising from the translation of the net investments in
foreign subsidiaries in non-euro area are also recognized
in other comprehensive income and included in equity as
cumulative exchange dierences.
Some loans granted to the subsidiaries are in substance
part of a net investment in the subsidiary, as settlement
of the loan is not likely to occur in the foreseeable future.
The exchange dierences arising from those loans are
recognized in other comprehensive income and exchange
dierences in equity.
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NOTE 16 Information of Suominen share
Share capital and number of shares
The registered share capital of Suominen Corporation
totals EUR 11,860,056. The number of Suominen’s
registered shares on December 31, 2020 was 58,259,219
shares.
Suominen has one series of shares. Each share has
one vote in the General Meeting of the shareholders
and all the shares have equal rights to dividend or other
distribution of equity. Suominen share has no nominal
value. Suominen Corporation shares are listed on Nasdaq
Helsinki Ltd.
Treasury shares
The treasury shares acquired by Suominen and the related
costs are presented as deductions of equity. At disposal
of acquired treasury shares the consideration received
is recognized in equity. In accordance with the Limited
Liability Companies Act, treasury shares do not entitle
to shareholder rights, such as right to receive dividend
or other distribution of funds, or right to attend General
Meeting.
At the end of the reporting period Suominen held
690,878 treasury shares. In accordance with the
resolution by the Annual General Meeting, 29,121 shares
were transferred on May 28, 2020 to the members of
the Board of Directors as their remuneration payable in
shares. In accordance with the matching share-based
payment program, 9,352 shares were transferred to the
participants of the program in September.
The share ownership of related parties in Suominen
is disclosed in Note 35 of the consolidated financial
statements.
Share-based plans
The share-based incentive plans are described in Note 32
of the consolidated financial statements.
Suominen has no option plans.
Share trading and price
The number of Suominen Corporation shares traded
on Nasdaq Helsinki January 1–December 31, 2020 was
12,937,753 shares (4,655,863 shares), accounting for 22.5%
(8.1%) of the average number of shares (excluding treasury
shares). The highest price was EUR 5.36 (EUR 2.70), the
lowest EUR 2.00 (EUR 2.04) and the volume-weighted
average price EUR 4.29 (EUR 2.38). The closing price at
the end of reporting period was EUR 5.08 (EUR 2.31). The
market capitalization (excluding treasury shares) was EUR
292.4 million on December 31, 2020 (EUR 132.9 million).
Number of shares
Changes in number of shares
Number of shares January 1, 2019 ,,
Number of shares December 31, 2019 ,,
Number of shares December 31, 2020 ,,
Changes in treasury shares
Number of shares January 1, 2019 ,
Conveyance of treasury shares, reward for
the Board of Directors -,
Number of shares December 31, 2019 ,
Conveyance of treasury shares, reward for the
Board of Directors -,
Conveyance of treasury shares, share-based plan -,
Number of shares December 31, 2020 ,
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121Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
Notifications in 2020 under Chapter 9,
Sections 5 and 6 of the Securities Market Act
Suominen Corporation received October 28, 2020 a
notification referred to in Chapter 9, Section 5 and 6 of
the Securities Market Act. According to the notification,
the shareholding of Varma Mutual Pension Insurance
Company in Suominen Corporation had fallen below the
threshold of 5%.
Largest shareholders December 31, 2020
Shareholder Number of shares % of shares and votes
Ahlstrom Capital B.V. ,, .%
Oy Etra Invest Ab ,, .%
Euroclear Bank SA/NV ,, .%
Ilmarinen Mutual Pension Insurance Company ,, .%
Pension Insurance Company Elo ,, .%
Varma Mutual Pension Insurance Company ,, .%
Mandatum Life Insurance Company ,, .%
Nordea Life Assurance Finland Ltd ,, .%
Oy H. Kuningas & Co. AB ,, .%
Skandinaviska Enskilda Banken (publ.) ,, .%
Nordea Nordic Small Cap Fund , .%
Mikko Maijala , .%
Juhani Maijala , .%
Laakkosen Arvopaperi Oy , .%
Nordea Bank ABP , .%
15 largest total ,, .%
Other shareholders ,, .%
Nominee registered ,, .%
Treasury shares , .%
In joint account (not in the book-entry securities system) , .%
Total ,, .%
Number of shares December , December ,
Number of shares excluding treasury shares , , , ,
Share-issue adjusted number of shares excluding treasury shares , , ,,
Average number of shares excluding treasury shares , , ,,
Average share-issue adjusted number of shares excluding treasury shares , , ,,
Average diluted share-issue adjusted number of shares excluding treasury shares ,, ,,
Suominen Corporation announced on December 29,
2020 a notification referred to in Chapter 9, Section
5 and 6 of the Securities Market Act. According to
the notification, Ahlström Capital Oy, as a result of an
intragroup merger in which AC Invest Two B.V. has been
merged into its parent company Ahlstrom Capital B.V.,
Ahlstrom Capital B.V. has therefore as of December
28, 2020 become the direct shareholder in Suominen
Corporation. Ahlstrom Capital B.V. is a 100% owned
subsidiary of Ahlström Capital Oy.
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Ownership distribution December 31, 2020
Number of
shareholders % of total Number of shares % of shares and votes
Corporations .% , , .%
Financial and insurance corporations .% ,, .%
General government .% ,, .%
Non-profit institutions .% ,, .%
Households , .% ,, .%
Foreign countries .% ,, .%
Total , .% ,, .%
Nominee registered ,, .%
In joint account
(not in the book-entry securities system) , .%
Treasury shares , .%
Total , ,, .%
Shareholders by share ownership December 31, 2020
Number of shares
Number of
shareholders % of total Number of shares % of shares and votes
1–100 , .% , .%
101–500 , .% , .%
501–1,000 .% , .%
1,001–5,000 .% ,, .%
5,001–10,000 .% ,, .%
10,001–50,000 .% ,, .%
50,001–100,000 .% ,, .%
100,001–500,000 .% ,, .%
more than 500,000 .% ,, .%
Total , ,% ,, .%
In joint account
(not in the book-entry securities system) , .%
Treasury shares , .%
Total , ,, .%
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123Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
NOTE 17 Interest-bearing liabilities
EUR thousand
Suominen entered in July 2020 into a new single-
currency syndicated revolving credit facility
agreement ofEUR 100 millionwith a maturity of three
years. The lenders for the facility are Danske Bank
A/S,FinlandBranch and Nordea. The new facility replaced
the previous EUR 100 million credit facility from 2017,
which had Nordea Bank AB (publ), Finnish Branch and
Svenska Handelsbanken AB (publ), Branch Operation in
Finland as lenders.
The new credit facilility has two one-year extension
options. The new credit facility includes leverage
ratio and gearing as financial covenants. The margin
of the facility will increase or decrease dependent
onSuominenmeeting two sustainability key performance
indicators, namely increase in the sales of sustainable
products and reduction of greenhouse gas emissions. The
credit facility has floating interest rates.
In September 2017, Suominen Corporation issued an
unsecured bond with a nominal value of EUR 85 million
and which carries a fixed annual interest of 2.50% and
matures on October 3, 2022. The bond is listed on Nasdaq
Helsinki Ltd. The bond constitutes a direct and unsecured
obligation of Suominen and it is guaranteed as for own
debt by certain subsidiaries of Suominen Corporation.
The remaining portion, EUR 15.7 million, of the bond
issued in 2014 was repaid in accordance with the bond
terms in September 2019.
Carrying
amount Fair value
Nominal
value
Carrying
amount Fair value
Nominal
value
Non-current interest-bearing liabilities
Lease liabilities , , , , , ,
Debentures , , , , , ,
Total , , , , , ,
Current interest-bearing liabilities
Current loans from financial institutions − − − , , ,
Lease liabilities , , , , , ,
Total , , , , , ,
Total , , , , , ,
It is the opinion of Suominen that presenting interest-bearing liabilities not only at amortized cost but also at nominal
value gives relevant additional information to the investors.
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124 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
Change in interest-bearing liabilities
Total interest-bearing liabilities at the beginning of the period , ,
Current liabilities at the beginning of the period , ,
Application of IFRS 16 − ,
Repayment of current liabilities, cash flow items -, -,
Drawdown of current liabilities, cash flow items , ,
Increases in current liabilities, non-cash flow items
Decreases of current liabilities, non-cash flow items - -
Reclassification from non-current liabilities , ,
Periodization of debenture to amortized cost, non-cash flow items −
Exchange rate dierence, non-cash flow item -
Current liabilities at the end of the period , ,
Non-current liabilities at the beginning of the period ,
Application of IFRS 16 − ,
Increases in non-current liabilities, non-cash flow items ,
Decreases of non-current liabilities, non-cash flow items - -
Reclassification to current liabilities -, -,
Exchange rate dierence, non-cash flow item -
Non-current liabilities at the end of the period , ,
Non-current debentures at the beginning of the period , ,
Periodization of debenture to amortized cost, non-cash flow items , ,
Non-current debentures at the end of the period , ,
Total interest-bearing liabilities at the end of the period , ,
Maturity of interest-bearing liabilities
2021 (2020) , ,
2022 (2021) , ,
2023 (2022) , ,
2024 (2023) , ,
2025− (2024−) , ,
Total , ,
Interest-bearing liabilities by currency
EUR , ,
USD , ,
BRL
Total , ,
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Accounting principles
Listed debentures are recognized at amortized cost using
the eective interest method. The fair value of a listed
debenture is measured using the market price at the end
of the reporting period.
Fees paid on loan facilities are recognized as transaction
costs of the loan to the extent that it is probable that
the facility will be drawn down. In this case, the fee is
recognized in the statement of financial position until the
draw-down of the loan occurs, and it is recognized in
profit or loss over the loan period. If it is not probable that
the loan facility will be utilized, the fee will be immediately
recognized in profit or loss.
Lease liabilities are disclosed in Note 26.
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NOTE 18 Classification of financial liabilities
EUR thousand
At amortized
cost
Carrying
amount Fair value Nominal value
Debentures , , , ,
Lease liabilities , , , ,
Interest accruals
Other current liabilities
Derivative liabilities
Trade payables , , , ,
Total December 31, 2020 , , , ,
At amortized
cost
Carrying
amount Fair value Nominal value
Loans from financial institutions , , , ,
Debentures , , , ,
Lease liabilities , , , ,
Interest accruals
Other current liabilities
Trade payables , , , ,
Total December 31, 2019 , , , ,
Accounting principles
Financial liabilities are classified as current liabilities if they
mature within 12 months from the end of the reporting
period.
A financial liability or a part of a financial liability is
removed from the statement of financial position when
the liability is extinguished, i.e. when the obligation
specified in the contract is discharged or cancelled or
expired.
Derivative instruments are presented in Note 19 of the
consolidated financial statements.
Interest-bearing liabilities, including lease liabilities,
are described in Note 17 of the consolidated financial
statements.
Trade payables
Trade payables are measured at amortized cost. The
carrying amount of trade payables equals to fair value
based on their short maturity.
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127Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
NOTE 19 Derivative instruments
EUR thousand
Nominal and fair values of derivative contracts
Nominal
value
Fair value,
net
Fair value,
positive
Fair value,
negative
Nominal
value
Fair value,
net
Fair value,
positive
Fair value,
negative
Currency forward contracts
Hedge accounting not applied , - − − − −
Derivative receivables and liabilities in statement
of financial position
Receivables
Derivatives, hedge accounting not applied −
Liabilities
Derivatives, hedge accounting not applied −
The fair values of derivatives are recognized in the
statement of financial position as gross amounts and they
can be oset with each other only in case of breach of
contractual terms or bankruptcy. If oset, the derivative
receivables from counterparty would be EUR 60 thousand.
Derivative instruments in profit or loss
Cost of goods sold
Currency derivatives, hedge accounting not applied -
Other operating expenses
Currency derivatives, hedge accounting not applied -
Net financial expenses
Interest rate dierences of currency derivatives - -
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Accounting principles
Derivatives are initially recognized at fair value on the date
a derivative contract is entered into and are subsequently
remeasured at fair value. The method of recognizing the
resulting gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, on the
nature of the item being hedged. Suominen can designate
derivatives as hedges of a particular risk associated
with a recognized asset or liability or a highly probable
forecasted transaction (cash flow hedge).
Fair values for currency forward contracts are
determined by using the spot rates and relevant swap
points based on interest rate dierences at the end of the
reporting period.
Derivative instruments at fair value through
profit or loss
Most of the Group’s derivative transactions, while
providing economic hedges, do not qualify for hedge
accounting under IFRS 9, and therefore changes in the
fair values of these derivative instruments are recognized
immediately in profit or loss.
Hedge accounting
The eective portion of changes in the fair value of
derivatives that are designated and qualified as cash flow
hedges is recognized in other comprehensive income and
presented in fair value reserve in equity.
When a hedging instrument expires or is sold, or when
a hedge no longer meets the hedge accounting criteria,
any cumulative gain or loss existing in equity at that
time remains in equity and is recognized in profit or loss
when the forecasted transaction is ultimately recognized
in profit or loss. If a forecast transaction is no longer
expected to incur, the cumulative gain or loss recognized
in equity is immediately recognized in profit or loss in the
same line item in statement of profit or loss where the
forecasted transaction would have been recognized.
At the inception of hedge accounting, Suominen
documents the relationship between the hedged item
and the hedging instrument as well as the aim for the
risk management and the hedging strategy. At the
inception of the hedge the Group tests and documents
the eectiveness of the hedging relationship by assessing
the ability of the hedging instrument to oset the fair
value changes arising from the hedged item. The Group
tests eectiveness retrospectively also at the end of each
reporting period.
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NOTE 20 Defined benefit plans
EUR thousand
Suominen has a defined benefit termination plan in Italy
(TFR, Trattamento di Fine Rapporto). The plan is unfunded
and closed for new entrants. The benefits paid are based,
among other things, on service years and end salary of
the participants. The obligation is determined based on
calculation made by independent actuaries.
Defined benefit liabilities in the statement of financial position
Present value of unfunded obligations
Deficit
Change in defined benefit obligation
Present value of defined benefit obligation January 1
Charged to profit or loss:
Interest expenses
Total recognized in profit or loss (gain - / loss +)
Remeasurements:
Actuarial gain (-) / loss (+) from change in demographic assumptions −
Actuarial gain (-) / loss (+) from change in financial assumptions
Demographic experience adjustments − -
Total remeasurments
Benefits paid - -
Present value of defined benefit obligation December 31
Changes in plan assets
Plan assets January 1 − −
Employer contributions
Benefits paid - -
Plan assets December 31 − −
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Significant actuarial assumptions
Discount rate (%) . .
Rate of future price inflation (%) . .
Sensitivity analysis of actuarial assumptions
Decrease in discount rate by 0.25 percentage points
Eect on defined benefit obligation
Increase in discount rate by 0.25 percentage points
Eect on defined benefit obligation - -
Expected payments to plan participants in the future years from the defined benefit obligation
Within 1 year
Between 1−2 years
Between 3−4 years
Between 5−10 years
Total
Accounting principles
The defined benefit obligations are measured as the
present value of the estimated future cash flows using
interest rates of government securities that have maturity
terms approximating the terms of related liabilities
or similar long-term interests. Plan assets, if any, are
recognized at fair value at the end of the reporting period.
For the defined benefit plans, costs are assessed using
the projected unit credit method. Under this method the
cost is charged to profit or loss so as to spread over the
service lives of employees. However, there are normally
no other costs than the net interest arising from the
defined benefit plan of Suominen in Italy.
Only past service costs due to plan amendments as
well as net interest on net defined benefit liability can
be recognized in profit or loss. Service costs, if any, are
recognized in profit or loss as employee benefits and net
interest in financial items. Remeasurements of net defined
benefit liability, such as actuarial gains and losses, are
recognized in other comprehensive income in the period
in which they occur with no subsequent recycling to profit
or loss.
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NOTE 22 Trade payables and
other liabilities
EUR thousand
Other non-current liabilities
Accrued expenses and deferred income
Total other non-current liabilities
Current liabilities
Trade payables , ,
Advances received
Other liabilities , ,
Accrued expenses and deferred income , ,
Total trade payables and other current
liabilities , ,
NOTE 21 Provisions
EUR thousand
Non-current provisions
Restoration provisions Income tax provisions Other provisions Total
January 1, 2019 , − − ,
Exchange dierence − −
Eect of discounting − −
December 31, 2019 , − − ,
Exchange dierence - − − -
Additions −
Eect of lease modifications - − − -
Eect of discounting − −
December 31, 2020 , ,
Current provisions
Other provisions
January 1, 2020 -
Additions
December 31, 2020
The provisions of Suominen consist of the obligations
to restore the leased premises at the end of the lease
contracts (Note 26), income tax provisions made as a
result of tax audits, provisions related energy taxes to be
paid in the future and litigation provisions.
Accounting principles
A provision is recognized when there is a present legal
or constructive obligation arising from past events
and it is probable, that the fulfillment of the obligation
requires payment and generates outflow of economic
benefits from the company, and when the amount of
the obligation can be measured reliably. Provisions are
recognized as liabilities in the statement of financial
position. The amount recognized as a provision is the best
estimate of the expenditure required to settle the present
obligation at the end of the reporting period. If the time
value of money is material, provisions are discounted.
A restructuring provision is recognized only when a
detailed and fully compliant plan has been prepared for it
and the implementation of the plan has been started or
notification of it has been made known to those whom
the arrangement concerns.
Accrued expenses and deferred income include, among
others, accrued interest expenses, accrued personnel
expenses and other accruals for expenses.
Other liabilities include, among others, liabilities from
indirect taxes.
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NOTE 23 Revenue from contracts
with customers
EUR thousand
The net sales of Suominen Group consist entirely of sales
of nonwovens. In 2020, sales to two (three) customers
exceeded each 10% of total net sales. Net sales to these
two customers amounted to EUR 84.9 million (68.2) and
EUR 74.4 million (66.7).
Other operating income is presented in Note 25.
Net sales by geographical destination
Finland , ,
Rest of Europe , ,
USA , ,
Rest of North and South America , ,
Rest of the world , ,
Total , ,
Net sales by business area
Europe , ,
Americas , ,
Unallocated exchange dierences of sales
and internal sales - -
Total , ,
to the customer. The delivered goods have been identified
in the contracts Suominen has made with the customer
(for example the quality and measurements of the product
have been defined). The contracts often define the target
for quantities to be delivered, but the customer is not
committed to the quantities. The supplied quantities
are based on the customer’s purchase orders and each
supplied quantity is invoiced separately.
The performance obligation is satisfied when the goods
have been delivered to the customer, ie. the performance
obligation is satisfied at a point of time. In most cases
the goods are handed over to the customer when the
goods leave the production plant. If, in accordance with
the terms of delivery, the risks and rewards of ownership
of the goods as well as control over the goods are
transferred to the customer only when the goods have
been delivered to the customer, revenue is recognized
only when the customer has received the goods.
The payment terms and times dier depending on the
customer. The applied payment term and the length of
the payment time are aected by, among other things, the
credit risk and prior payment behavior of the customer.
In addition, the geographical location of the invoicing
production plant as well of the customer have an eect
on the payment terms. Suominen has preferred payment
terms defined in the credit policy, but for commercial
reasons it is possible to deviate from these payment terms.
For the most part trade receivables are due within 30-90
days from the invoicing date.
There are no significant financing components in the
transaction prices and the considerations are paid in cash.
Some of the customer contracts include a definition of
a rebate, which is granted to the customer if the delivered
quantities exceed the predefined level, i.e. in these cases
the transaction price includes a variable consideration.
The eect of the variable consideration on the transaction
price is taken into account in revenue recognition by
estimating the probability of the realization of the rebate
for each contract. The estimation is based on the most
likely amount. When estimating the probability, Suominen
takes into account the historical information of the
customer (such as whether the deliveries in the past have
reached the level which entitles the customer to receive
the rebate), the current situation at the time of the delivery
of the goods as well as forecasts on future deliveries.
Currency analysis of trade payables
EUR , ,
USD , ,
BRL
Other currencies
Total , ,
Accounting principles
Suominen applies IFRS 15 Revenue from Contracts with
Customers in revenue recognition. Net sales include the
total invoicing value of products less sales tax, discounts
and rebates. Foreign exchange dierences arising from
trade receivables are recognized as sales adjustments.
The goods Suominen sells are nonwoven rolls. The
customer can benefit from each nonwoven roll either on
its own or together with other resources readily available
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The uncertainty inherent in estimating the variable
consideration is considered to be so immaterial that the
variable consideration has not been constrained. The
estimated transaction price is reassessed latest at the end
of each reporting period.
The receivable from the customer is recognized at
the transaction price. This means in practice that both
the invoiced trade receivable from the customer and
recognized revenue are adjusted in accounting with an
accrual based on the estimated rebate amount.
In some of the customer contracts the transaction price
of the goods is tied to the raw material costs of Suominen.
The eect of the raw material prices on transaction prices
is, however, applied only to future transaction prices and
they do not aect the prices of already delivered goods.
As the delivered quantities are distinct performance
obligations, raw material clauses are not applied
retrospectively.
Sales prices are defined in the customer contracts
separately for each product. The price for each customer
is based on, among other things, quantities, transaction
currency and the geographical location of the customer.
Variable considerations (rebates) are allocated to the
performance obligations which are included in the
contract, unless otherwise agreed in the contract. In these
cases the variable considerations are allocated only to
those performance obligations they relate to.
Suominen has no material incremental costs of
obtaining a contract which would fulfill the capitalization
criteria. Any incremental costs are recognized as expense
when incurred, as the amortization period of such
capitalized incremental costs would be one year or less.
Suominen has no such costs to fulfill a contract which
would fulfill the capitalization criteria of IFRS 15.95-97.
NOTE 24 Entity-wide disclosures
EUR thousand
Property, plant and equipment, intangible assets and
right-of-use assets by geographical location
Finland , ,
Rest of Europe , ,
USA , ,
Brazil , ,
Total , ,
Net sales by geographical destination as well as net sales
by business area are presented in Note23.
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NOTE 25 Other operating
income and expenses
EUR thousand
Other operating income
Gains from disposal of intangible assets
and property, plant and equipment
Gains from changes in leases -
Indemnities
Rental income
Sales of recycled products , ,
Other operating income
Total , ,
Recycled products consist of waste generated in the
manufacturing process as well as products which do not
fulfill quality requirements. These products are sold for
recycling.
Other operating expenses
Expected credit losses of trade receivables
during the period, net - -
Currency derivatives, hedge accounting
not applied, net -
Indemnities -, −
Other operating expenses - -
Total -, -,
Accounting principles
Gains from the disposal of property, plant and equipment
and intangible assets, insurance compensations and
revenues other than from product sales, such as rental
income (Note 26) and proceeds from sale of recycled
products, are recognized as other operating income. Also
gains arising from changes in leases are recognized as
other operating income.
Losses from the sales of assets, expected credit losses
of trade receivables as well other expenses not associated
with ordinary operations are recognized as other
operating expenses. Also losses arising from changes
in leases contracts are recognized as other operating
income.
NOTE 26 Leases
EUR thousand
Suominen owns the majority of its production facilities
(ie. buildings and land) as well as all of its production lines.
The most significant lease contracts Suominen has consist
of the leased production facilities in Italy and Windsor
Locks, USA. In addition, part of the production facility in
Spain is leased. Other lease contracts are mainly lease
contracts of oces, smaller machinery and equipment,
such as forklifts and oce equipment, as well as leases of
vehicles.
Suominen acts also as a lessor to a minor extent in
some of its production facilities where it leases parts
of the real estates it owns. These lease contracts are
classified as operating leases as they do not transfer
substantially all the risks and rewards incidental to
ownership of the underlying assets to the lessees. The
lease payments received from these lease contracts are
recognized as other operating income on a straight-line
basis in accordance with the terms of the lease contracts
(Note 25).
Suominen has not received COVID-19 related rent
concessions.
Income and expenses in the statement
of profit or loss arising from leases
Depreciation expense of right-of-use
assets (Note8) -, -,
Rental expenses relating to short-term
leases* - -
Rental expenses relating to leases of low
value assets - -
Expenses arising from non-lease
components of the leasing contracts
and non-deductible indirect taxes - -
Gains and losses arising from lease
modifications, net
Rental income
Total in operating profit -, -,
Interest expenses on lease liabilities
(Note30) - -
Interest expenses on provisions related
to leasing contracts (Note30) - -
Total income and expenses -, -,
* 2019 includes also rental expenses from leases ending within 12 months from the
transition date of January 1, 2019.
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Cash outflow for leases
Paid interest expenses on lease liabilities - -
Repayment of finance lease liabilities -, -,
Rental expenses - -
Total cash outflow for leases -, -,
Minimum lease payments under non-
cancellable operating leases in future periods
Within one year
Between 1−5 years
After 5 years − −
Total
Commitments to leases not yet commenced are disclosed
in Note 36.
Minimum non-cancellable lease payments
(rental income) in future periods
Within one year
Between 1−2 years
Between 2−3 years − −
Between 3−4 years − −
Between 4−5 years − −
After 5 years − −
Total
Accounting principles
If a contract conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration, the contract is or contains a lease.
Suominen assesses at each contract inception whether
a contract is or contains a lease. If the contract is a lease,
Suominen, as a lessee, recognizes in accordance with
IFRS 16 Leases the right-of-use assets (Note 8) and lease
liabilities (Note 17) for the rights and obligations created
by leases.
Suominen applies the recognition exemptions allowed
by IFRS 16. This means that low value asset leases are
recognized as rental expenses on straight-line basis in the
statement of profit or loss. Based on the standard as well
as the materiality principle, Suominen has defined that
an asset is of low value if its value as new is EUR 5,000 or
less. Such assets are for example computers and other
smaller oce equipment.
The recognition exemptions allow also that leases,
where the lease term is initially 12 months or less and the
leases do not contain purchase options, are recognized as
rental expenses on straight-line basis in the statement of
profit or loss. The election for short-term leases has to be
made by the class of the underlying asset. In Suominen,
for example leases of temporary warehouses as well
as short-term leases of machinery and equipment and
vehicles are included in short-term leases.
In addition, the lease and non-lease components are
not separated for all asset classes, such as vehicles and
forklifts.
Gains arising from modifications in lease contracts are
recognized as other operating income and losses as other
operating expenses (Note 25).
Lease liabilities
At the commencement date of a lease, Suominen
recognizes a lease liability measured at the present value
of the lease payments to be made over the lease term.
The lease payments include fixed payments less any
lease incentives receivable, variable lease payments that
depend on an index or rate and amounts expected to be
paid under residual value guarantees. If the lease contract
contains a purchase option and it is reasonable certain
that the option will be exercised, the exercise price is
included in the lease payments. Also, if it is reasonable
certain that the lease will be terminated, the termination
penalties are included in the lease payments.
In calculating the present value of the lease liabilities,
Suominen uses either the interest rate implicit in the
lease or, if that is not easily attainable, the incremental
borrowing rate at the commencement date of the lease.
The majority of the lease liabilities are calculated with the
incremental borrowing rate, defined separately for each
group company taking into account the geographical
location and credit worthiness of each company.
After the commencement date, the carrying amount of
lease liabilities is reduced for the lease payments made
and increased to reflect interest on the lease liability.
In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the
lease term, a change in the lease payments, such as a
change to future payments resulting from a change in an
index or rate used to determine the lease payments or a
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change in the assessment of an option to purchase the
asset.
Part of the Group’s lease contracts continue with a
new lease term unless the contract is terminated during
the termination period defined in the contract. As both
the lessee and the lessor have a right to terminate the
contract without the other party’s consent and without
sanctions, the recognized lease terms of these contracts
do not include the use of the option to extend the lease.
In addition, there are some lease contracts which include
options to extend the lease, but it is unlikely that these
options are exercised. The lease period taken into account
of these lease contract is the initial lease term excluding
the use of the option.
The lease contracts of all Suominen’s leased production
facilities include either an option to extend the lease or
they continue automatically, if they are not terminated
during the termination period. If neither of the contract
parties has terminated the contract during the termination
period, Suominen redefines the remaining lease period.
When the lease contract includes variable lease
payments based on an index, the lease liability is initially
measured using the index at the commencement date
of the lease. The lease liabilities arising from these lease
contracts are remeasured when the lease payments
change due to the change in the index.
Right-of-use assets
Suominen recognizes right-of-use assets at the
commencement date of the lease. Right-of-use assets
are subsequently measured at cost, less cumulative
depreciation and impairment losses, and are adjusted
for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities
initially recognized, initial direct cost incurred, and lease
payment made before the commencement date less any
lease incentives received.
Some of the lease contracts of the production facilities
include an obligation to restore the underlying asset to
the condition required by the terms and conditions of
the lease. These restoration obligations (Note 21) are
recognized as provisions in the statement of financial
position and the initial amount is included in the cost of
the right-of-use asset.
Right-of-use assets are depreciated on a straight-line
basis over the shorter of the lease term and the estimated
useful lives of the assets. If the ownership of the leased
asset transfers to Suominen at the end of the lease
or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life
of the asset. The right-of-use assets are also subject to
impairment.
Critical accounting estimates and judgements
The carrying amounts of the right-of-use assets and lease
liabilities depend on, among other things, the length
of the leasing contracts as well as the potential options
and possibilities to lengthen or shorten the lease term.
The carrying amounts are especially aected with the
estimates made of the lease terms and possible renewals
of the lease agreements of the production facilities.
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NOTE 27 Fees paid to auditors
EUR thousand
NOTE 28 Employee benefits
EUR thousand
Fees paid to auditors are included in administration
expenses.
Ernst & Young Oy has been acting as the principal
auditor of the Group and the parent company since the
Annual General Meeting of 2015.
Fees paid to auditors
Fees for statutory audit - -
Other services - -
Total - -
The fees paid by the parent company of the Group,
Suominen Corporation, are presented below.
Fees paid to auditors, Suominen Corporation
Fees for statutory audit - -
Other services - -
Total - -
Wages and salaries -, -,
Share-based payments -, -
Pensions, defined contribution plans -, -,
Other personnel expenses -, -,
Total -, -,
Average number of personnel
Number of personnel, end of reporting
period
in Finland
Management remuneration is disclosed in detail in Note
35 of the consolidated financial statements.
Share-based payments are disclosed in more detail in
Note 32 of the consolidated financial statements.
Defined benefit plans are disclosed in more detail in
Note 20 of the consolidated financial statements.
Accounting principles – pension benefits
The Group has several pension plans in accordance with
local conditions and practices in the countries where
it operates. The plans are generally funded through
premium payments to insurance companies or similar
entities. The pension schemes are in accordance with
local legislation and based on established local practices.
Pension schemes may include additional pension
benefits, options for early retirement, or compensation for
disability.
Pension schemes are classified either as defined
contribution pension plans or defined benefit pension
plans. A defined contribution pension plan is a plan
under which the Group pays fixed contributions into
a separate entity and has no obligation to pay further
contributions if the separate entity has no sucient assets
to pay all employee benefits. The contributions to defined
contribution plans are charged to profit or loss in the
period to which the contributions relate.
Suominen has a defined benefit termination plan in Italy
(TFR) (Note 20). In other countries Suominen has defined
contribution pension plans.
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NOTE 29 Depreciation and amortization
EUR thousand
Depreciation and amortization by function
Cost of goods sold -, -,
Sales, marketing and administration expenses -, -,
Research and development - -
Total -, -,
Depreciation and amortization by asset category
Intangible rights -, -,
Other intangible assets - -
Buildings and constructions -, -,
Machinery and equipment -, -,
Other tangible assets - -
Right-of-use assets -, -,
Total -, -,
Accounting principles
The amortization of intangible assets is described in
Note6, the depreciation of property, plant and equipment
in Note7 and the depreciation of right-of-use assets in
Note8.
The carrying amounts of property, plant and equipment
as well as of intangible assets are assessed to determine
whether there are any indications that the carrying
amounts of the assets exceed their recoverable amounts
and an impairment loss should be recognized. Indications
of the assets’ possible impairment can be a significant
decline in an asset’s market value, adverse changes in the
business environment, adverse changes in the extent to
which or manner in which an asset is used or expected to
be used, or a deterioration in financial performance below
what was expected.
If such indications of impairment exist, the recoverable
amounts are measured for those assets for which there
are indications of impairment. Recoverable amount is the
higher of fair value of the asset less costs of disposal and
value in use. When measuring an asset’s value in use, the
future cash flows derived from the asset are discounted
by using discount rates which reflect the average cost of
capital before taxes of the asset or, if the asset belongs to
a cash generating unit, of that cash generating unit. The
risk inherent in the value in use is captured by analyzing
variations in the amount or timing of cash flows.
An impairment loss of an asset can be reversed if a
positive change in the estimates of the recoverable
amount has occured. The impairment loss made in
prior years is reversed no more than up to the value
which would have been determined for the asset, net of
amortization or depreciation, had no impairment loss
been recognized in prior years.
Impairment testing of goodwill is presented in Note 5.
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NOTE 30 Financial income and expenses
EUR thousand
Financial income
Interest income from receivables at
amortized cost
Interest income from receivables at fair
value through profit or loss*
Other interest income
Currency derivatives, interest rate
dierence
Fair value change −
Total ,
Financial expenses
Interest expenses on liabilities at
amortized cost -, -,
Interest expenses on lease liabilities - -
Interest expenses on defined benefit plans - -
Interest expenses on discounted
provisions - -
Other interest expenses - -
Currency derivatives, interest rate
dierence - -
Financial expenses on sale of trade
receivables - -
Other financial expenses -, -,
Total -, -,
Losses from receivables at fair value
through profit or loss
Impairment loss* - -
Total - -
Net exchange rate dierences -
Total financial income and expenses -, -,
* From loan receivables, that are mandatorily measured at fair value through profit or
loss in accordance with IFRS 9.
Currency dierences in operating profit
Net sales - -
Cost of goods sold -
Other operating expenses -
Accounting principles
Accounting of transactions in foreign currencies is
described in Note 1.
Interest expenses are accrued for and mainly
recognized in profit or loss for each period. If an asset is
a qualifying asset as defined in IAS 23 Borrowing Costs,
the borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying
asset are capitalized to the acquisition cost of the asset.
The capitalization applies mainly to property, plant and
equipment and intangible assets.
Capitalized borrowing costs during the reporting period
were EUR 91 thousand (EUR 188 thousand). The average
capitalization rate used was 3.91%.
The credit risk related to loan receivables is initially
estimated based on 12-month expected credit losses.
If the credit risk has increased significantly since initial
recognition, the credit risk is evaluated based on lifetime
expected credit losses. Payment defaults or late payments
can be considered as indications of impairment of the
receivable or increase in the credit risk of the receivable
(Note 12).
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NOTE 31 Income taxes
EUR thousand
Income tax charge in statement of profit or loss
Current income tax charge -, -,
Adjustments in respect of current income tax of previous years , -
Change in deferred tax assets - -
Change in deferred tax liabilities -
Other income taxes - -
Total income tax charge -, -,
Income taxes recognized in other comprehensive income
Exchange dierences -
Reclassified to profit or loss -
Defined benefit plans, remeasurements -
Total taxes recognized in other comprehensive income -
Corporate income taxes were positively impacted by the
US tax reliefs as a result of the COVID-19 pandemic.
The Group companies have tax losses, totaling EUR
11.1 million (EUR 29.4 million), which can be applied
against future taxable income. A deferred tax asset has
been recognized for all tax losses as the management
has estimated in preparing the 2020 financial statements
that Suominen is able to utilize the unused tax losses. In
addition, it will take several years before the tax losses
expire or there is no expiry date for the losses.
Deferred tax liability has not been recognized in 2020
or 2019 of the undistributed earnings of Finnish or foreign
subsidiaries, as the majority of such earnings can be
transferred to the owner without any tax consequences.
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141Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
Accounting principles
The consolidated financial statements include current
taxes, which are based on the taxable results of the group
companies for the reporting period together with tax
adjustments for previous reporting periods, calculated
in accordance with the local tax rules, and the change in
deferred tax liabilities and assets.
Income taxes which relate to items recognized in other
comprehensive income are also recognized in other
comprehensive income.
Suominen has some uncertain tax positions due to
local tax audits as the tax authorities have challenged the
tax deductible expenses Suominen has declared in the
income tax returns. Suominen has assessed for each tax
audit whether the interpretations of the tax authorities
are justified and adjusted the recognized amounts, if
needed, in order to correspond the expected future
payments. Even though the management estimates that
the end results of the tax audits will not result in material
additional costs exceeding the already recognized
amounts, the actual results can dier from the estimates.
Suominen has some uncertain tax positions related
to previous years’ taxes and interpretations of tax
losses related to, among others, the possibility to utilize
confirmed tax losses. Should the final outcome dier
from the outcome estimated by Suominen, the estimated
possible additional costs at the end of the reporting
period would total to approximately EUR 0.6 million.
The Group’s deferred tax liabilities and assets have been
calculated for temporary dierences, which have been
obtained by comparing the carrying amount of each asset
or liability item with their tax bases. Deferred tax assets are
recognized for deductible temporary dierences and tax
losses to the extent that it is probable that taxable profit
will be available, against which tax credits and deductible
temporary dierences can be utilized. In calculating
deferred tax liabilities and assets, the tax rate used is the
tax rate in force at the time of preparing the financial
statements or which has been enacted by end of the
reporting period. Changes in tax rates have been taken
into account when calculating deferred taxes. Corporate
income tax rate in Finland is 20% (20%).
Reconciliation of income tax expense calculated at statutory tax rates
with income tax expense in the statement of profit or loss
Profit before income taxes , ,
Income taxes at the tax rate applicable to the parent -, -
Dierence due to dierent tax rates of foreign subsidiaries -, -
Tax exempt income and non-deductible expenses -
Eect of changes in tax rates and tax laws −
Losses, for which no deferred tax asset is recognized − -
Deferred taxes recognized during the reporting period in respect of previous years' temporary dierences and
confirmed losses , -
Deferred taxes reversed during the reporting period -, -
Adjustments in respect of current income tax of previous periods and witholding and other income taxes , -
Use of losses, for which no deferred tax asset has been recognized ,
Income taxes in the statement of profit or loss -, -,
Eective tax rate, % . .
Tax assets and liabilities in the statement of financial position
Deferred tax assets , ,
Assets for current tax
Deferred tax liabilities , ,
Liabilities for current tax
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142 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
Principal temporary dierences arise from depreciation
and amortization of property, plant and equipment and
intangible assets, defined benefit plans, recognition of
net assets of acquired companies at fair value, measuring
assets at fair value and confirmed tax losses.
IFRIC 23 Interpretation clarifies the accounting of
uncertainty in accounting for income taxes. Under
IFRIC 23 the key test is whether it is probable that
the tax authority will accept the company’s chosen
tax treatment. If it is probable that the tax authority
accepts the company’s chosen tax treatment in the tax
return, there is no uncertainty which would have to be
recognized in the financial statements. If it is not probable,
then the uncertainty is reflected in the measurement of
current or deferred tax. The uncertainty is reflected in
the measurement by using either the most likely amount
or the expected value, which ever predicts the outcome
better.
The judgements and estimates applied in estimating the
uncertainty over an income tax treatment are reassessed if
facts and circumstances change.
In accordance with the interpretation, the company has
to determine, whether to consider each tax treatment
separately or together with one or more other uncertain
tax treatments. The approach that better predicts the
resolution of the uncertainty in tax treatments has to be
followed.
Critical accounting estimates and judgements
Recognition and measurement of deferred tax liabilities
and assets include management estimates, especially
in deferred tax assets arising from confirmed tax losses
of the group companies or from other temporary
dierences. Deferred tax assets are recognized for
deductible temporary dierences and tax losses to
the extent that it is probable that taxable profit will
be available against which tax credits and deductible
temporary dierences can be utilized. All tax liabilities and
assets are reviewed at the end of the reporting period and
changes are recognized in comprehensive income.
Group companies can be subjects of tax audits. In these
tax audits the tax authorities can challenge Suominen’s
view of the taxable income and not fully accept it. In these
cases the recognized amounts are adjusted, if needed, in
order to correspond the expected future payments. The
possible adjustments as well as the recognized income tax
liability are based on estimates of the outcome of the tax
audit.
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143Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
Reconciliation of deferred tax assets
January ,
Exchange
dierence
Recognized in
profit or loss
Recognized in other
comprehensive
income or in equity
Osetting
with deferred
tax liabilities
December ,
Employee benefits − −
Property, plant and equipment and
intangible assets - - − −
Tax losses , - - − − ,
Other temporary dierences , - − ,
Total , - - − ,
Osetting with deferred tax
liabilities -, − − , -,
Total , - - , ,
January ,
Exchange
dierence
Recognized in
profit or loss
Recognized in other
comprehensive
income or in equity
Osetting
with deferred
tax liabilities
December ,
Employee benefits − - −
Property, plant and equipment and
intangible assets - − −
Tax losses , -, − − ,
Other temporary dierences , - − ,
Total , - - − ,
Osetting with deferred tax
liabilities -, - − − -,
Total , - - - ,
Reconciliation of deferred tax liabilities
January ,
Exchange
dierence
Recognized in
profit or loss
Recognized in other
comprehensive
income or in equity
Osetting
with deferred
tax assets
December ,
Property, plant and equipment and
intangible assets , -, − − ,
Other temporary dierences , - - − − ,
Equity instruments − − - − −
Total , -, - - − ,
Osetting with deferred tax assets -, − − , -,
Total , -, - - , ,
January ,
Exchange
dierence
Recognized in
profit or loss
Recognized in other
comprehensive
income or in equity
Osetting
with deferred
tax assets
December ,
Property, plant and equipment and
intangible assets , − − ,
Other temporary dierences , - − − ,
Equity instruments − − − −
Total , − − ,
Osetting with deferred tax assets -, - − − -,
Total , − ,
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NOTE 32 Share-based payments
Suominen has share-based incentive plans targeted to
the key employees of the Group. In accordance with the
terms of the plans, shares of Suominen Corporation are
granted to the participants if vesting conditions are met.
The rewards are partly settled in cash. The cash portion
is intended to cover income taxes and tax-related costs
arising from the reward to the participant. No reward will
be paid, if a participant’s employment or service ends
before the reward payment. The Board of Directors of
Suominen Corporation is entitled to reduce the rewards
as agreed in the plan if the limits set by the Board of
Directors for the share price are not reached.
The aim of the plans is to combine the objectives of the
shareholders and the persons participating in the plans in
order to increase the value of the company in the long-
term, to bind the participants to the company, and to oer
them competitive reward plans based on earning and
accumulating the company’s shares.
A member of the Executive Team must hold 50% of
the net number of shares given on the basis of the plans,
as long as his or her shareholding in total corresponds
to the value of half of his or her annual gross salary. The
President & CEO must hold 50% of the net number of
shares given on the basis of the plans until his or her
shareholding in total corresponds to the value of his or
her annual gross salary. Such number of shares must be
held as long as the participant’s employment or service in
a group company continues
Share-based incentive plan 2018−2020
The Board of Directors of Suominen Corporation
approved on December 11, 2017 a share-based incentive
plan (performance share plan) for the Group management
and key employees. The vesting period includes calendar
years 2018−2020. The plan is directed to approximately 20
people.
The rewards to be paid on the basis of the vesting period
2018−2020 correspond to the value of an approximate
maximum total of 502,000 Suominen Corporation shares
(including also the portion to be settled in cash). The
Board of Directors will decide separately on new vesting
periods. The Board of Directors will decide on the plan’s
vesting conditions and required performance levels for
each condition at the beginning of a vesting period.
The potential rewards from the vesting period
2018−2020 will be settled partly in the company’s shares
and partly in cash in 2021.
Share-based incentive plan 2019−2021
The Board of Directors of Suominen Corporation resolved
on January 30, 2019 on a new share-based incentive plan
for the Group management and Group key employees.
The three-year vesting period of the new share-based
plan includes calendar years 2019–2021. The Board
of Directors decides on the performance criteria and
required performance levels for each criterion at the
beginning of each vesting period. The plan is directed to
approximately 20 people.
The potential reward of the plan from the vesting period
2019–2021 will be based on the Relative Total Shareholder
Return (TSR). The rewards to be paid on the basis of the
vesting period 2019–2021 correspond to the value of
an approximate maximum total of 729,000 Suominen
Corporation shares (including also the portion to be
settled in cash).
The potential rewards from the vesting periods
2019–2021 will be settled partly in shares and partly in
cash in 2022.
Matching share plan 2019–2021
The Board of Directors of Suominen Corporation
approved on June 4, 2019 a new share-based incentive
plan. The matching share plan is directed to selected
key employees in the Suominen Group. The prerequisite
for receiving a reward from the plan is that a participant
acquires the company’s shares, amounting to the number
resolved by the Board. If the prerequisites set for a
participant have been fulfilled and his or her employment
or service in a company belonging to the Suominen
Group is in force at the time of the reward payment, he or
she will receive matching shares as a reward.
The plan includes vesting periods, the duration of which
is resolved by the Board. The potential reward will be settled
partly in shares and partly in cash after a vesting period.
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145Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
The plan rewards to be settled in 2020–2021 will
amount to a maximum total of 200,000 Suominen
Corporation shares (including also the portion to be
settled in cash).
In accordance with the matching share-based payment
program, 9,352 shares were transferred to the participants
of the program in September 2020.
Share-based incentive plan 2020−2022
The Board of Directors of Suominen Corporation resolved
on January 29, 2020 on a new vesting period of the
share-based incentive plan for the Group management
and Group key employees. The vesting period of the plan
includes calendar years 2019–2021. The plan is directed
to approximately 20 people.
The potential reward of the plan from the vesting
period 2020–2022 will be based on the Relative Total
Shareholder Return (TSR). The rewards to be paid on the
basis of the vesting period 2020–2022 correspond to
the value of an approximate maximum total of 893,000
Suominen Corporation shares (including also the portion
to be settled in cash). The Board of Directors will be
entitled to reduce the rewards agreed in the plan if the
limits set by the Board of Directors for the share price are
reached.
The potential rewards from the vesting periods 2020–
2022 will be settled partly in shares and partly in cash in
2023.
Accounting principles
The fair values of the shares to be potentially settled
based on the share-based plans are measured at grant
dates based on the market value of the share. If the plan
includes market conditions, they are taken into account in
the fair value. The fair value is recognized in profit or loss
during the vesting period.
When the vesting conditions of a share-based incentive
plan include market conditions, such as TSR (“Total
Shareholder Return”), the fair value measured at grant date
will not be subsequently changed and the cost estimate
recognized will not be reversed, if the market condition
does not vest. If the other vesting conditions of the plan
(such as service condition and result based conditions) are
not fulfilled, the cost estimates based on these conditions
are reversed.
Suominen has share-based payment transactions
which have net settlement features for withholding tax
obligations. At the time of exercise or vesting Suominen
withholds a number of shares that is equal to the
monetary value of the employee’s tax obligation from
the total number of shares that would have otherwise
been issued to the employee, and transfers the amount
in cash to tax authorities on behalf of the employee. In
accordance with IFRS 2, in these cases both the portion
settled in shares and the portion settled in cash are
recognized in equity and also the fair value of the cash
portion is based on the fair value at grant date.
Eect on the profit for the period and on financial position in
2020
EUR thousand
Expense (-) for the reporting period -,
Recognized in equity during 2020 ,
Liability December 31, 2020
Estimate of the amount for settling the employees'
tax obligation December 31, 2020 ,
Measurement of instruments granted during the reporting
period
Share price at grant date, EUR .
Volatility assumption, % %
Expected dividends, EUR .
Eect of market condition in fair value, % %
Valuation model Monte Carlo
Fair value per share, EUR .
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146 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
Information on share-based
incentive plans
Share-based
incentive plan
−
Share-based
incentive plan
−
Matching share plan
–
Share-based
incentive plan
−
Total / weighted
average
Maximum number of shares,
including the portion to be
settled in cash , , , , ,,
Initial grant date December , January , June , January ,
Vesting date March , March , September , March ,
Vesting conditions EBIT %, total
shareholder return
(TSR)
Total shareholder
return (TSR)
Share ownership Total shareholder
return (TSR)
Employment
precondition until
reward payment
Employment
precondition until
reward payment
Employment
precondition until
reward payment
Employment
precondition until
reward payment
Maximum contractual life,
years . . . .
Remaining contractual life,
years . . . . .
Number or persons at the end
of reporting period
Payment method Shares and cash Shares and cash Shares and cash Shares and cash
Changes in 2020
Share-based
incentive plan
−
Share-based
incentive plan
−
Matching share plan
–
Share-based
incentive plan
− Total
Outstanding at the beginning
of the period , , , − ,,
Granted − − − , ,
Forfeited -, -, − -, -,
Exercised − − -, − -,
Outstanding at the end
of the period , , , , ,,
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147Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
NOTE 33 Earnings per share
Profit for the period
EUR thousand
Profit for the period ,
Number of shares
Average share-issue adjusted number
of shares
, , ,,
Average diluted share-issue adjusted
number of shares excluding treasury
shares
,, ,,
Earnings per share
EUR
Basic . .
Diluted . .
Calculation of earnings per share
Basic earnings per share are calculated by dividing the
net result attributable to owners of the parent by the
weighted share-issue adjusted average number of shares
outstanding during the reporting period, excluding shares
acquired by the Group and held as treasury shares.
When calculating diluted earnings per share the number
of shares is adjusted with the eects of the share-based
incentive plans.
NOTE 34 Adjustments
to statement of cash flows
EUR thousand
Adjustments to cash flow from operations
Adjustments to profit for the period
Income taxes , ,
Financial income and expenses , ,
Depreciation, amortization and
impairment losses , ,
Gains and losses from disposal of
property, plant and equipment and
intangible assets - -
Other non-cash flow items in profit for
the period , ,
Total , ,
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148 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
NOTE 35 Related parties
Management remuneration
Remuneration of Board of Directors
as paid
EUR annual fee meeting fee annual fee meeting fee
Jan Johansson, Chair of the Board of Directors , , , ,
Andreas Ahlström, Deputy Chair of the Board from March 19, 2020 , , , ,
Laura Raitio , , , ,
Sari Pajari-Sederholm, from March 19, 2019 , , , −
Björn Borgman, from March 19, 2020 , , − −
Nina Linander, from March 19, 2020 , , − −
Risto Anttonen, Deputy Chair of the Board, until March 19, 2020 − , , ,
Hannu Kasurinen, until March 19, 2020 − , , ,
Jaana Tuominen, until March 19, 2019 − − − ,
Total , , , ,
The Annual General Meeting held on March 19, 2020
resolved that 40% of the annual remuneration for the
Board of Directors is paid in Suominen Corporation’s
shares. The number of shares transferred to the members
of the Board of Directors as their remuneration payable
in shares for 2020 was 29,121 shares. The shares were
transferred on May 28, 2020 and the value of the
transferred shares totaled EUR 92,400, or approximately
EUR 3.17 per share.
The members of the Board of Directors have no
pension arrangements with Suominen.
The members of the Board of Directors have no specific
agreements related to termination of the membership in
the Board due to a public tender oer.
Remuneration of the President & CEO
Petri Helsky
as paid
EUR
Salaries , ,
Paid bonuses , −
Share-based payments , −
Total salaries , ,
Fringe benefits , ,
Total , ,
Statutory pensions , ,
Supplementary pensions , ,
A written contract has been made with the President &
CEO, Petri Helsky. Based on the agreement he has a six-
month period of notice. Should the company terminate
the contract, additional compensation corresponding
to the 12 months’ salary will also be paid. The President
& CEO has a supplementary pension plan, with a cost
of 11.5% of his annual salary as defined in the Finnish
Pension Law. The supplementary pension arrangement
grants pension benefits at the age of 63. The President &
CEO has no specific agreement related to termination of
contract due to a public tender oer.
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Remuneration of other members of the Executive Team
as paid
EUR
Salaries , ,,
Paid bonuses , ,
Severance payment, including salary
during the period of notice − ,
Share-based payments , −
Total salaries ,, ,,
Fringe benefits , ,
Total ,, ,,
Statutory pensions , ,
Supplementary pensions , ,
The members of the Executive Team have normally
no other pension arrangements than statutory pensions.
Supplementary pension arrangements in the USA are
included in statutory pensions. The retirement age of other
members of the Executive Team is according to the normal
local legislation.
In accordance with the terms and conditions of the
matching restricted share plan 2019, Suominen Corporation
transferred a total of 9,352 shares without consideration to
the participants of the plan’s vesting period 2019–2020. Of
the total number of transferred shares, 4,676 shares were
transferred to President & CEO Petri Helsky and 4,676 shares
to another member of the Executive Team.
Managements’ share ownership
number of shares
December ,
December ,
Board of Directors
Jan Johansson, Chair of the Board of
Directors , ,
Andreas Ahlström, Deputy Chair of
the Board from March 19, 2020 , ,
Laura Raitio , ,
Sari Pajari-Sederholm , ,
Björn Borgman, from March 19, 2020 , −
Nina Linander, from March 19, 2020 , −
Risto Anttonen, Deputy Chair of the
Board, until March 19, 2020 − ,
Hannu Kasurinen,
until March 19, 2020 − ,
Total , ,
Total % of shares and votes .% .%
Share-based incentives plans are disclosed in Note 32
of the consolidated financial statements. The accrual
based on the non-vested share-based incentive plans in
accordance with IFRS standards was EUR 1,068 thousand
for the related parties at the end of the reporting period.
Accounting principles
Parties are considered to be related parties if a party is
able to exercise control over the other or substantially
influence its decision-making concerning its finances and
business operations.
Suominen Group’s related parties include the parent
of the Group (Suominen Corporation) and subsidiaries.
In addition, the related parties of Suominen include the
members of the Board of Directors, President & CEO
and the members of the Executive Team as well as their
family members and their controlled companies. In
addition, shareholders who have a significant influence
in Suominen through share ownership are included in
related parties. Suominen has no associated companies.
In its transactions with related parties Suominen follows
the same commercial terms as in transactions with third
parties.
No loans, guarantees or other collaterals have been
given on behalf of related parties, with the exception of
the subsidiaries.
December ,
December ,
Executive Team
Petri Helsky , ,
Toni Tamminen , −
Klaus Korhonen , ,
Lynda Kelly , ,
Mimoun Saïm , ,
Markku Koivisto , ,
Ernesto Levy − ,
Total , ,
Total % of shares and votes .% .%
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150 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
NOTE 36 Contingent liabilities
EUR thousand
Guarantees and other commitments
Guarantees on own commitments , ,
Other own commitments , ,
Total , ,
Other contingencies
Contractual commitments to acquire
property, plant and equipment , −
Commitments to leases not yet
commenced
Total ,
Guarantees on own commitments are guarantees given to
suppliers.
Some subsidiaries of Suominen have guaranteed the
external loans of Suominen Corporation. The maximum
guaranteed amount is the unpaid principal of the loans
and unpaid accrued interest expenses at the end of the
reporting period.
Minimum lease payments under non-cancellable
operating leases in future periods are disclosed in Note
26.
Accounting principles – contingent liabilities
A contingent liability is a possible obligation which is
not recognized as a liability in the statement of financial
position as, for example, its existence is not yet confirmed
and is not in control of the company. The management
uses estimates to assess the amount of contingent
liabilities.
NOTE 37 Restatement of previously published figures
EUR thousand
Published Restatement Restated
January −
December ,
January −
December ,
Net sales , − ,
Cost of goods sold - , , -,
Gross profit , , ,
Other operating income , − ,
Sales, marketing and administration expenses -, -, -,
Research and development expenses -, − -,
Other operating expenses -, − -,
Operating profit , − ,
Net financial expenses -, − -,
Profit before income taxes , − ,
Income taxes -, − -,
Profit for the period −
Suominen has reclassified some overhead expenses from cost of goods sold to sales, marketing and administration
expenses.
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151Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
NOTE 38 Events after
the reporting period
Suominen Corporation received a notification on January
15, 2021 referred to Chapter 9, Section 5 and 6 of the
Securities Market Act. According to the notification, the
shareholding of companies controlled by Mr. Erkki Etola
in Suominen Corporation had crossed the 15% flagging
threshold and was 15.34%. The share of Oy Etra Invest Ab
was 13.34% and of Tiiviste-Group Oy was 2.0%.
Tiiviste-Group Oyis a company controlled by Mr.Erkki
Etolathrough direct ownership and Oy Etra Invest is a
company controlled by Mr.Erkki Etolathrough direct and
indirect ownership.
Suominen Corporation received a notification on
January18, 2021 referred to Chapter 9, Section 5 and 6
of the Securities Market Act. According to the notification,
the shareholding of Elo Mutual Pension Insurance
Company in Suominen Corporation has fallen under
the5% flagging threshold.
Shareholders’ Nomination Board proposal regarding
Board composition and remuneration ahead of the
2021 Annual General Meeting
On January 29, 2021 the Shareholders’ Nomination
Board (Nomination Board) gave its proposal covering the
composition of the Board of Directors and remuneration
of the Board members to the next Annual General
Meeting.
The Nomination Board of Suominen Corporation’s
shareholders proposes to the Annual General Meeting
that the number of Board members remains unchanged
and would be six.
The Nomination Board proposes to the Annual General
Meeting that Andreas Ahlström,Björn Borgman,Nina
Linander,Sari Pajari-SederholmandLaura Raitiowould be
re-elected as members of Suominen Corporation’s Board
of Directors.
Out of the current Board members, the Chair of the
BoardJan Johanssonhas informed that he is not available
as a candidate for the Board of Directors.
In addition, the Nomination Board proposes thatJaakko
Eskolawould be elected as a new member of the Board
of Directors. The Nomination Board also proposes to the
Annual General Meeting that Jaakko Eskola would be
elected as the Chair of the Board of Directors.
The Nomination Board of the shareholders ofSuominen
Corporationproposes to the Annual General Meeting
that the remuneration of the Board of Directors remains
unchanged and would be as follows: the Chair would be
paid an annual fee ofEUR 66,000and the Deputy Chair
and other Board members an annual fee ofEUR 31,000.
The Nomination Board also proposes that the Chair of
the Audit Committee would be paid an additional fee
ofEUR10,000.
Further, the Nomination Board proposes that the fees
payable for each Board and Committee meeting would be
as follows:EUR 500for each meeting held in the home
country of the respective member,EUR 1,000for each
meeting held elsewhere than in the home country of
the respective member andEUR 500for each meeting
attended by telephone or other electronic means. No
fee is paid for decisions made without convening a
meeting. In 2020 the fee for meetings held as a telephone
conference wasEUR 250. Otherwise the meeting fees are
proposed to remain unchanged.
60% of the annual fees is paid in cash and 40% in
Suominen Corporation’s shares. The number of shares
to be transferred will be determined based on the share
value in the stock exchange trading maintained byNasdaq
Helsinki Ltd, calculated as the trade volume-weighted
average quotation of the share during the one-month
period immediately following the date on which the
interim report of January–March 2021of the company is
published. The shares will be transferred out of the own
shares held by the company by the decision of the Board
of Directors byMay 31, 2021at the latest.
Compensation for expenses will be paid in accordance
with the company’s valid travel policy.
Performance share plan 2021–2023
The Board of Directors of Suominen Corporation resolved
on February 3, 2021 on a new share-based long-term
incentive plan for the management and key employees.
The aim of the new plan is to combine the objectives of
the shareholders and the persons participating in the plan
in order to increase the value of the company in the long-
term, to bind the participants to the company, and to oer
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152 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
them competitive reward plans based on earning and
accumulating the company’s shares.
The new long-term performance share plan has one
three-year vesting period, which includes calendar years
2021–2023. The performance share plan is directed to
approximately 20 people including the President & CEO of
Suominen.
The Board of Directors resolved that the potential
reward for the vesting period 2021–2023 will be based on
the Relative Total Shareholder Return (TSR). The maximum
total amount of potential share rewards to be paid on the
basis of the vesting period 2021–2023 is approximately
470,000 shares of Suominen Corporation, representing
the gross reward including taxes and tax-related costs
arising from the reward.
The Board of Directors will be entitled to reduce the
rewards agreed in the performance share plan if the
limits set by the Board of Directors for the share price are
reached.
If the targets of the plan are reached, rewards will be
paid to participants in spring 2024 after the end of the
vesting period. The potential rewards from the vesting
period 2021–2023 will be paid partly in the company’s
shares and partly in cash. The cash portion is intended to
cover taxes and tax-related costs arising from the reward
to the participant. The company also has the right to pay
the reward fully in cash under certain circumstances. As a
rule, no reward will be paid, if a participant’s employment
or service ends before the reward payment.
A member of the Executive Team must hold 50% of
the net number of shares given on the basis of the plan,
as long as his or her shareholding in total corresponds
to the value of half of his or her annual gross salary. The
President & CEO of Suominen Corporation must hold 50%
of the net number of shares given on the basis of the plan,
as long as his or her shareholding in total corresponds to
the value of his or her annual gross salary. Such number
of shares must be held as long as the participant’s
employment or service in a group company continues.
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153Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
KEY RATIOS PER SHARE
Key ratios per share are share-issue adjusted.
Earnings per share, EUR . . -.
Earnings per share, EUR, diluted . . -.
Cash flow from operations per share, EUR . . .
Equity per share, EUR . . .
Price per earnings per share (P/E) ratio . . -.
Dividend and return of capital per share, total, EUR* . . −
Dividend payout ratio, % . ,. N/A
Dividend yield, % . . N/A
Number of shares, end of period, excluding treasury shares , , ,, ,,
Average number of shares excluding treasury shares , , ,, ,,
Average share-issue adjusted number of shares excluding treasury shares , , ,, ,,
Share price, end of period, EUR . . .
Share price, period low, EUR . . .
Share price, period high, EUR . . .
Volume-weighted average price during the period, EUR . . .
Market capitalization, EUR million . . .
Number of traded shares during the period ,, ,, ,,
Number of traded shares during the period, % of average number of shares (share turnover) . . .
*2020 the proposal of the Board of Directors to the Annual General Meeting.
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154 Consolidated financial statements (IFRS) | Suominen Annual Report 2020
Calculation of key ratios per share
Key ratios per share are either IFRS key ratios (earnings per share) or required by Ordinance of the Ministry of Finance in
Finland or alternative performance measures (cash flow from operations per share).
Earnings per share
Basic earnings per share (EPS) =
Profit for the period
Share-issue adjusted average number of shares excluding treasury
shares
Diluted earnings per share (EPS) =
Profit for the period
Average diluted share-issue adjusted number of shares excluding
treasury shares
Calculation of earnings per share is disclosed in Note 33.
Cash flow from operations per share
Cash flow from operations per share =
Cash flow from operations
Share-issue adjusted number of shares excluding treasury shares,
end of the reporting period
Equity per share
Equity per share =
Total equity attributable to owners of the parent
Share-issue adjusted number of shares excluding treasury shares,
end of the reporting period
Cash flow from operations, EUR thousand , ,
Share-issue adjusted number of shares excluding treasury shares,
end of the reporting period , , ,,
Cash flow from operations per share, EUR . .
Total equity attributable to owners of the parent,
EUR thousand , ,
Share-issue adjusted number of shares excluding treasury shares,
end of the reporting period , , ,,
Equity per share, EUR . .
Reference
Consolidated statement of cash flows
Note16
Reference
Consolidated statement of financial
position
Note16
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Dividend and return of capital per share
Dividend and return of capital per
share
=
Dividend and return of capital for the reporting period
Number of issued shares at end of the reporting period,
excluding treasury shares
Dividend yield, %
Dividend yield, % =
Dividend and return of capital per share x 100
Share price at end of the period
Dividend payout ratio, %
Dividend payout ratio, % =
Dividend and return of capital per share x 100
Basic earnings per share
Price per earnings per share (P/E)
Price per earnings per share (P/E) =
Share price at end of the period
Basic earnings per share
Dividend and return of capital for the reporting period, EUR thousand , ,
Number of issued shares at end of the reporting period,
excluding treasury shares , , ,,
Dividend and return of capital per share, EUR . .
Dividend and return of capital per share x 100 . .
Share price at end of the period, EUR . .
Dividend yield, % . .
Dividend and return of capital per share x 100 . .
Basic earnings per share, EUR . .
Dividend payout ratio, % . ,.
Share price at end of the period, EUR . .
Basic earnings per share, EUR . .
Price per earnings per share (P/E) . .
Reference
The proposal by the Board
Note16
Reference
Note33
Reference
Note16
Reference
Note16
Note33
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Market capitalization
Market capitalization =
Number of shares at the end of reporting period excluding treasury
shares x share price at the end of period
Share turnover
Share turnover =
The proportion of number of shares traded during the period to
weighted average number of shares excluding treasury shares
Number of shares at the end of reporting period excluding treasury
shares , , ,,
Share price at end of the period, EUR . .
Market capitalization, EUR million . .
Number of shares traded during the period , , ,,
Average number of shares excluding treasury shares ,, , ,
Share turnover, % . .
Reference
Note16
Note16
Reference
Note16
Note16
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157Suominen Annual Report 2020 | Consolidated financial statements (IFRS)
PARENT COMPANY
FINANCIAL STATEMENTS (FAS)
Income statement
EUR
Note
January –
December ,
January –
December ,
Net sales ,,. ,,.
Cost of goods sold -,,. -,,.
Gross profit ,,. ,,.
Other operating income ,. .
Sales and marketing expenses -,,. -,,.
Research and development -,,. -, ,.
Administration expenses -,,. -, ,.
Other operating expenses -,,. -,,.
Operating profit / loss ,,. - , ,.
Financial income ,,. ,,.
Financial expenses -,,. -,,.
Total financial income and expenses ,,. ,,.
Profit / loss before appropriations and income taxes ,,. -,.
Change in depreciation dierence ,. - ,.
Group contributions -,,. -,.
Income taxes -,. -,.
Profit / loss for the period ,,. -,,.
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Balance sheet
EUR
Note December , December ,
ASSETS
Non-current assets
Intangible assets , ,,. ,,.
Tangible assets , ,. ,.
Investments
Shares in subsidiaries ,,. ,,.
Other investments ,. ,.
Loan receivables
Loan receivables from group companies ,,. ,,.
Loan receivables from others ,,. ,,.
Other non-current receivables ,. ,.
Total non-current assets ,,. ,,.
Current assets
Loan receivables
Loan receivables from group companies − ,,.
Loan receivables from others ,,. , , .
Trade receivables ,. ,.
Other current receivables ,, . ,, .
Cash and cash equivalents ,,. ,,.
Total current assets ,,. ,, .
TOTAL ASSETS ,,. ,,.
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159Suominen Annual Report 2020 | Parent company financial statements (FAS)
EUR
Note December , December ,
EQUITY AND LIABILITIES
Equity
Share capital ,,. ,,.
Share premium account ,,. ,,.
Reserve for invested unrestricted equity ,,. ,,.
Other equity ,,. ,,.
Profit / loss for the period ,,. -,,.
Total equity ,,. ,,.
Untaxed reserves
Depreciation dierence ,,. ,,.
Liabilities
Non-current liabilities
Interest-bearing liabilities
Debentures ,,. ,,.
Total non-current liabilities ,,. ,,.
Current liabilities
Interest-bearing liabilities
Loans from financial institutions − ,,.
Current loans from group companies ,,. ,,.
Trade payables and other current liabilities ,,. ,,.
Total current liabilities ,,. ,,.
Total liabilities ,,. ,,.
TOTAL EQUITY AND LIABILITIES ,,. ,,.
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Cash flow statement
EUR thousand
Note
January –
December ,
January –
December ,
Cash flow from operations
Profit / loss for the period , -,
Adjustments to profit / loss for the period , ,
Cash flow from operations before change in net working capital , ,
Increase (-) or decrease (+) in trade and other receivables -
Increase (+) or decrease (-) in interest-free current liabilities -
Cash flow from operations before payments of financial items and
income taxes ,
Paid and received interests and other financial items -, ,
Group contribution paid - −
Paid income taxes - -
Cash flow from operations , ,
Cash flow from investments
Capital expenditure , - -,
Investments in subsidiaries − -,
Dividend income from subsidiaries , ,
Cash flow from investments , -,
Cash flow from financing
Change in current interest-bearing liabilities -, -,
Change in non-current loan receivables , −
Change in current loan receivables , ,
Distribution of dividends -, –
Cash flow from financing , ,
Change in cash and cash equivalents , ,
Cash and cash equivalents January 1 , ,
Exchange dierence on cash and cash equivalents -,
Change in cash and cash equivalents , ,
Cash and cash equivalents December 31 , ,
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161Suominen Annual Report 2020 | Parent company financial statements (FAS)
NOTE 1 Accounting policies
Suominen Corporation is a public limited liability company
organized under the laws of the Republic of Finland and
domiciled in Helsinki, Finland (Karvaamokuja 2 B, 00380
Helsinki, Finland). Suominen’s shares are publicly traded in
Nasdaq Helsinki Ltd. (Small Cap, from January 1, 2021 in
Mid Cap). Suominen Corporation is the parent company
of the Group.
The financial statements of Suominen Corporation
are prepared in accordance with Finnish Accounting
Standards (FAS). The consolidated financial statements
of Suominen Group are prepared in accordance with
International Financial Reporting Standards (IFRS), and
Suominen Corporation applies in its separate financial
statements the same accounting principles as Suominen
Group to the extent it is possible within the framework of
Finnish accounting practice. The accounting principles
of Suominen Group are presented in the notes to the
consolidated financial statements.
The main dierences in the accounting principles
between Suominen Corporation’s separate financial
statements and Suominen Group’s consolidated financial
statements are presented below.
Net sales
Net sales consist of sales of services to group companies
and of royalty income.
Financial assets and liabilities and derivative
instruments
Financial assets and liabilities with the exception of
derivative instruments are recognized at cost or at cost
less impairment losses. Derivatives are recognized at fair
value. Currency derivatives, if not hedging financial items
or are otherwise not considered to be financial items,
are recognized in other operating income and expenses.
If hedge accounting as defined in IFRS 9 is applied, the
eective portion of changes in the fair value of derivatives
is recognized in fair value reserve in equity. Both fair value
measurement of derivatives as well as hedge accounting
are presented in Note 19 of the consolidated financial
statements.
Leases
Lease payments are recognized as lease expenses. Leasing
obligations are presented as contingent liabilities.
Debentures
Debentures are presented at nominal value in the balance
sheet, and periodized transaction costs are recognized in
prepayments.
Untaxed reserves
Untaxed reserves consist of a depreciation dierence.
This dierence between scheduled depreciation and
amortization and the depreciation and amortization
deducted in arriving to taxable profit is presented as a
separate item in the income statement and in the balance
sheet.
Group contributions
Group contributions given are presented as
appropriations.
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NOTE 2 Other operating income
and expenses
EUR thousand
January –
December ,
January –
December ,
Other operating income
Gains from currency derivatives −
Other operating income −
Total
Other operating expenses
Services purchased from group
companies -, -,
Losses from currency derivatives − -
Other operating expenses - -
Total -, -,
NOTE 3 Personnel expenses
EUR thousand
January –
December ,
January –
December ,
Salaries -, -,
Pension expenses - -
Other personnel costs - -
Total -, -,
Average number of personnel
Number of personnel, end of period
Management remuneration
Management remuneration is presented in Note 35 of the
consolidated financial statements.
NOTE 4 Audit fees
EUR thousand
January –
December ,
January –
December ,
Statutory audit - -
Tax consulting − -
Other services - -
Total - -
Ernst & Young Oy (EY) has been acting as the principal
auditor of the Group and the parent company since the
Annual General Meeting of 2015.
NOTE 5 Depreciation, amortization
and impairment
EUR thousand
January –
December ,
January –
December ,
Depreciation, amortization and
impairment by function
Cost of goods sold -, -,
Sales and marketing expenses - -
Research and development - -
Administration expenses -, -,
Total -, -,
Depreciation, amortization and
impairment by asset category
Machinery and equipment - -
Intangible rights -, -,
Total -, -,
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163Suominen Annual Report 2020 | Parent company financial statements (FAS)
NOTE 6 Financial income and expenses
EUR thousand
January –
December ,
January –
December ,
Interest income from group companies , ,
Interest income from others
Dividend income from group companies , ,
Other financial income from group companies
Net currency exchange dierences -, ,
Interest expenses to group companies - -
Interest expenses to others -, -,
Impairment losses and fair value change of financial assets - -,
Other financial expenses to others -, -,
Total , ,
NOTE 7 Appropriations
EUR thousand
January –
December ,
January –
December ,
Increase (-) or decrease (+) in cumulative depreciation dierence -
Given group contributions -, -
Total -, -
NOTE 8 Income taxes
EUR thousand
January –
December ,
January –
December ,
Income taxes from financial year - -
Withholding taxes and other direct taxes - -
Income taxes from previous years -
Total - -
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NOTE 9 Intangible assets
EUR thousand
Intangible rights
Advance payments
and construction
in progress Total Total
Acquisition cost January 1 , , ,
Additions ,
Decreases and disposals − − − -,
Reclassifications - − −
Acquisition cost December 31 , − , ,
Accumulated amortization January 1 -, − -, -,
Amortization for the period -, − -, -,
Decreases and disposals − − − ,
Accumulated amortization December 31 -, − -, -,
Carrying amount December 31 , − , ,
NOTE 10 Tangible assets
EUR thousand
Land and water
areas
Machinery and
equipment
Other tangible
assets Total Total
Acquisition cost January 1 −
Additions − − −
Decreases and disposals − − − − -
Acquisition cost December 31
Accumulated depreciation January 1 − - - - -
Depreciation for the period − - - - -
Decreases and disposals − − − −
Accumulated depreciation December 31 − - - - -
Carrying amount December 31
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NOTE 11 Investments
EUR thousand
Shares in group
companies
Other
investments Total Total
Carrying amount January 1 , , ,
Investments , − , ,
Impairment losses − - - -,
Carrying amount December 31 , , ,
Group companies are presented in Note 9 of the consolidated financial statements.
Share of shares
and votes, %
Number
of shares
Nominal value
of shares,
EUR thousand
Carrying amount
of shares,
EUR thousand
Equity of
the company,
EUR thousand
Profit/loss in
the latest financial
statements,
EUR thousand
Kiinteistö Oy
Killinpolku, Virrat,
Finland .
Bright Maze Oy,
Helsinki, Finland . , -, -,
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NOTE 12 Receivables
EUR thousand
December ,
December ,
Non-current receivables
Rental deposits
Total non-current receivables
Current receivables
Other receivables
Prepaid expenses and accrued income
Income taxes
Transaction costs of loans , ,
Prepaid expenses
Unrealized gain from currency derivatives −
Total prepaid expenses and accrued income , ,
Current receivables from group companies
Trade receivables
Interest-bearing receivables − ,
Total ,
Total other current receivables , ,
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NOTE 13 Equity
EUR thousand
December ,
December ,
Share capital January 1 and December 31 , ,
Share premium account January 1 and December 31 , ,
Reserve for invested unrestricted equity January 1 , ,
Conveyance of treasury shares
Reserve for invested unrestricted equity December 31 , ,
Retained earnings January 1 , ,
Dividend distribution -, −
Unpaid dividends −
Retained earnings December 31 , ,
Profit / loss for the period , -,
Equity December 31 , ,
Distributable funds
EUR
December ,
Retained earnings December 31 ,,
Reserve for invested unrestricted equity December 31 ,,
Profit for the period ,,
Distributable funds ,,
Funds available for dividend distribution
EUR
Retained earnings December 31 ,,
Profit for the period ,,
Funds available for dividend distribution ,,
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NOTE 14 Share capital
Share capital and shares are presented in Note 16 of the
consolidated financial statements.
NOTE 15 Interest-bearing liabilities
EUR thousand
December ,
December ,
Non-current interest-bearing
liabilities
Debentures , ,
Total non-current interest-bearing
liabilities , ,
Current interest-bearing liabilities
Loans from financial institutions − ,
Loans from group companies , ,
Total current interest-bearing
liabilities , ,
Total interest-bearing liabilities , ,
Repayments of external non-current interest-bearing liabilities
Debentures − , − − −
NOTE 16 Interest-free liabilities
EUR thousand
December ,
December ,
Current interest-free liabilities
Trade payables
Other current liabilities
Accrued expenses
Accrued interest expenses
Accrued personnel expenses ,
Other accrued expenses
Total accrued expenses , ,
Liabilities to group companies
Other liabilities to group companies ,
Total ,
Total current interest-free liabilities , ,
NOTE 17 Contingent liabilities
EUR thousand
December ,
December ,
Guarantees
On behalf of group companies , ,
On own behalf
Total , ,
Guarantees on behalf of group companies are guarantees
given to suppliers and lessors.
Rental and leasing obligations
Falling due within next 12 months
Falling due later
Total
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NOTE 18 Derivative instruments
EUR thousand
Nominal and fair values of derivative instruments
December , December ,
Nominal
value Fair value
Nominal
value Fair value
Currency forward contracts
External , − −
NOTE 19 Adjustments to cash flow statement
EUR thousand
January –
December ,
January –
December ,
Adjustment to profit / loss for the period
Change in depreciation dierence -
Group contributions ,
Financial income and expenses -, -,
Income taxes
Depreciation and amortization , ,
Other non-cash items in profit for the period
Total adjustments to profit / loss for the period , ,
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PROPOSAL BY THE BOARD
OF DIRECTORS FOR
DISTRIBUTION OF FUNDS
The profit of the financial year 2020 of Suominen Corporation, the parent company of Suominen Group, was EUR
6,584,937.34. The funds distributable as dividends, including the profit for the period, were EUR 12,095,497 and total
distributable funds were EUR 93,456,859.
The Board of Directors proposes that a dividend of EUR 0.10 per share shall be distributed for the financial year 2020
and that the profit shall be transferred to retained earnings. In addition, the Board of Directors proposes, that in addition
to the dividend, a return of capital of EUR 0.10 per share shall be distributed for the financial year 2020 from the reserve
for invested unrestricted equity.
On February 3, 2021 the company had 57,568,341 issued shares, excluding treasury shares. With this number of shares,
the total amount of dividends to be distributed would be EUR 5,756,834.10 and the total amount of the return of capital
would be EUR 5,756,834.10, in total EUR 11,513,668.20.
There have been no significant changes in the company’s financial position after the end of the review period.
Helsinki, February 3, 2021
Jan Johansson
Chairman of the Board
Nina Linander
Petri Helsky
President and CEO
Andreas Ahlström
Sari Pajari-Sederholm
Björn Borgman
Laura Raitio
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AUDITOR’S REPORT (Translation of the Finnish original)
To the Annual General Meeting of Suominen Corporation
Report on the Audit of Financial
Statements
Opinion
We have audited the financial statements of Suominen
Corporation (business identity code 1680141-9) for the
year ended December 31, 2020. The financial statements
comprise the consolidated statement of financial
positions, statement of profit or loss, statement of
comprehensive income, statement of changes in equity,
statement of cash flows and notes, including a summary
of significant accounting policies, as well as the parent
company’s income statement, balance sheet, cash flow
statement and notes.
In our opinion
- the consolidated financial statements give a true and
fair view of the Group’s financial position as well as its
financial performance and its cash flows in accordance
with International Financial Reporting Standards (IFRS)
as adopted by the EU.
- the financial statements give a true and fair view of the
parent company’s financial performance and financial
position in accordance with the laws and regulations
governing the preparation of financial statements in
Finland and comply with statutory requirements.
Our opinion is consistent with the additional report
submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing
practice in Finland. Our responsibilities under good
auditing practice are further described in the Auditor’s
Responsibilities for the Audit of Financial Statements
section of our report.
We are independent of the parent company and of
the group companies in accordance with the ethical
requirements that are applicable in Finland and are
relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-
audit services that we have provided to the parent
company and group companies are in compliance with
laws and regulations applicable in Finland regarding these
services, and we have not provided any prohibited non-
audit services referred to in Article 5(1) of regulation (EU)
537/2014. The non-audit services that we have provided
have been disclosed in Note 27 to the consolidated
financial statements.
We believe that the audit evidence we have obtained
is sucient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation
to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our
assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures,
including the procedures performed to address the
matters below, provide the basis for our audit opinion on
the accompanying financial statements.
We have also addressed the risk of management
override of internal controls. This includes consideration
of whether there was evidence of management bias that
represented a risk of material misstatement due to fraud.
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172 Auditor’s report | Suominen Annual Report 2020
Key Audit Matter How our audit addressed the Key Audit Matter
Revenue Recognition
We refer to the Group’s accounting policies and
the Note 23
Revenues of Suominen Group consist entirely of sales
of nonwovens to customers. Revenue from customer
contracts is recognized at a point in time, when the
control of the underlying products has been transferred
to the customer, typically at the time when the products
are shipped from Suominen’s factory.
Revenue is a key performance measure used by the
Group, which could create an incentive for premature
revenue recognition.
Revenue recognition was determined to be a key audit
matter and a significant risk of material misstatement
referred to in EU Regulation No 537/2014, point (c) of
Article 10(2) due to the risk related to incorrect timing
(cut-o) of revenue recognition.
Our audit procedures to address the risk of material
misstatement relating to revenue recognition, included,
among others:
- assessing the Group’s accounting policies over revenue
recognition and comparing them with applicable
accounting standards;
- assessing the revenue recognition process and
methodologies and testing controls where applicable;
- obtaining confirmations of accounts receivable balances
from customers and analyzed credit invoices issued after
the balance sheet date;
- testing revenue recognition including cut-o with
analytical procedures and by substantive sales
transactions testing and
- assessing the Group’s disclosures in respect of revenues
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173Suominen Annual Report 2020 | Auditor’s report
Responsibilities of the Board of Directors
and the Managing Director for the Financial
Statements
The Board of Directors and the Managing Director are
responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance
with International Financial Reporting Standards (IFRS)
as adopted by the EU, and of financial statements that
give a true and fair view in accordance with the laws
and regulations governing the preparation of financial
statements in Finland and comply with statutory
requirements. The Board of Directors and the Managing
Director are also responsible for such internal control as
they determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of
Directors and the Managing Director are responsible for
assessing the parent company’s and the Group’s ability
to continue as going concern, disclosing, as applicable,
matters relating to going concern and using the going
concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting
unless there is an intention to liquidate the parent
company or the Group or cease operations, or there is no
realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of
Financial Statements
Our objectives are to obtain reasonable assurance on
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with good auditing practice will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of the financial statements.
As part of an audit in accordance with good auditing
practice, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of
the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sucient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
- Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the eectiveness
of the parent company’s or the Group’s internal control.
- Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
- Conclude on the appropriateness of the Board of
Directors’ and the Managing Director’s use of the going
concern basis of accounting and based on the audit
evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the parent company’s or the
Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the
related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future
events or conditions may cause the parent company or
the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events so that the financial
statements give a true and fair view.
- Obtain sucient appropriate audit evidence regarding
the financial information of the entities or business
activities within the Group to express an opinion on the
consolidated financial statements. We are responsible
for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit
opinion.
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174 Auditor’s report | Suominen Annual Report 2020
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant ethical
requirements regarding independence, and communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were of
most significance in the audit of the financial statements
of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in
our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General
Meeting on March 19, 2015, and our appointment
represents a total period of uninterrupted engagement of
6 years.
Other information
The Board of Directors and the Managing Director
are responsible for the other information. The other
information comprises the report of the Board of
Directors and the information included in the Annual
Report, but does not include the financial statements and
our auditor’s report thereon. We have obtained the report
of the Board of Directors prior to the date of this auditor’s
report, and the Annual Report is expected to be made
available to us after that date.
Our opinion on the financial statements does not cover
the other information.
In connection with our audit of the financial statements,
our responsibility is to read the other information
identified above and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
With respect to report of the Board of Directors, our
responsibility also includes considering whether the
report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
In our opinion, the information in the report of the
Board of Directors is consistent with the information
in the financial statements and the report of the Board
of Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed on the other
information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Helsinki, February 3, 2021
Ernst & Young Oy
Authorized Public Accountant Firm
Toni Halonen
Authorized Public Accountant
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175Suominen Annual Report 2020 | Auditor’s report
KEY RATIOS
Net sales, EUR million . . .
Comparable operating profit, EUR million . . .
% of net sales . . .
Operating profit, EUR million, . . .
% of net sales . . .
EBITDA, EUR million . . .
% of net sales . . .
Profit before income taxes, EUR million . . -.
% of net sales . . -.
Profit for the period, EUR million . . -.
% of net sales . . -.
Cash flow from operations, EUR million . . .
Total assets, EUR million . . .
Return on equity (ROE), % . . -.
Return on invested capital (ROI), % . . .
Equity ratio, % . . .
Interest-bearing net debt, EUR million . . .
Capital employed, EUR million . . .
Gearing, % . . .
Gross capital expenditure, EUR million . . .
% of net sales . . .
Depreciation, amortization, impairment losses and reversals of impairment losses, EUR million -. -. -.
Expenditure on research and development, EUR million . . .
as % of net sales . . .
Average number of personnel
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176 Key ratios | Suominen Annual Report 2020
Calculation of key ratios
Some of Suominen’s key ratios are alternative performance measures. An alternative performance measure is a key ratio
which has not been defined in IFRS standards. Suominen believes that the use of alternative performance measures
provides useful information for example to investors regarding the Group’s financial and operating performance and
makes it easier to make comparisons between the reporting periods.
Operating profit and comparable operating profit
Operating profit, or earnings before interest and taxes (EBIT) is an important measure of profitability as by ignoring
income taxes and financial items it focuses solely on the company’s ability to generate profit from operations.
Operating profit is presented as a separate line item in the consolidated statement of profit or loss.
Operating profit (EBIT) = Profit before income taxes + net financial expenses
Comparable operating profit (EBIT) =
Profit before income taxes
+ net financial expenses, adjusted with items aecting comparability
In order to improve the comparability of result between reporting periods, Suominen presents comparable operating
profit as an alternative performance measure. Operating profit is adjusted with material items that are considered to
aect comparability between reporting periods. These items include, among others, impairment losses or reversals
of impairment losses, gains or losses from the sales of property, plant and equipment or intangible assets or other
assets and restructuring costs. Suominen did not have any items aecting comparability in 2020 or 2019.
EBITDA
EBITDA is an important measure that focuses on the operating performance excluding the eect of depreciation
and amortization, financial items and income taxes, in other words what is the margin on net sales after deducting
operating expenses.
EBITDA = EBIT + depreciation, amortization and impairment losses
Gross capital expenditure
Suominen considers gross capital expenditure as a relevant measure in order to understand for example how the
Group maintains and renews its production machinery and facilities. The gross investments do not include increases
in right-of-use assets.
Gross capital expenditure includes also capitalized borrowing costs and capitalized cash flow hedges.
EUR thousand
Operating profit , ,
+ Depreciation, amortization and impairment losses , ,
EBITDA , ,
EUR thousand
Increases in intangible assets ,
Increases in property, plant and equipment , ,
Gross capital expenditure , ,
Reference
Consolidated statement of profit or loss
Note29
Reference
Note6
Note7
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177Suominen Annual Report 2020 | Key ratios
Cash and cash equivalents
Cash and cash equivalents = Cash + other financial assets
Interest-bearing net debt
Suominen considers interest-bearing net debt to be an important measure for investors to be able to understand the
Group’s indebtedness. It is the opinion of Suominen that presenting interest-bearing liabilities not only at amortized
cost but also at nominal value gives relevant additional information to the investors.
Interest-bearing net debt =
Interest-bearing liabilities at nominal value
- interest-bearing receivables - cash and cash equivalents
Return on equity (ROE), %
The return on equity is one of the most important profitability ratios used by owners and investors. The ratio
measures the ability of a company to generate profits from its shareholders’ investments in the company and it
defines the yield on the company’s equity during the reporting period.
Return on equity (ROE), % =
Profit for the reporting period (rolling 12 months) x 100
Total equity attributable to owners of the parent (quarterly average)
EUR thousand
Interest-bearing liabilities , ,
Tender and issuance costs of the debentures , ,
Interest bearing receivables -, -,
Cash and cash equivalents -, -,
Interest-bearing net debt , ,
Interest-bearing liabilities , ,
Tender and issuance costs of the debentures , ,
Nominal value of interest-bearing liabilities , ,
EUR thousand
Profit for the reporting period (rolling 12 months) ,
Total equity attributable to owners of the parent December 31, 2019 / 2018 , ,
Total equity attributable to owners of the parent March 31, 2020 / 2019 , ,
Total equity attributable to owners of the parent June 30, 2020 / 2019 , ,
Total equity attributable to owners of the parent September 30, 2020 / 2019 , ,
Total equity attributable to owners of the parent December 31, 2020 / 2019 , ,
Average , ,
Return on equity (ROE), % . .
Reference
Note17
Note12
Consolidated statement of financial
position
Note17
Note17
Reference
Consolidated statement of profit or loss
Consolidated statement
of financial position
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178 Key ratios | Suominen Annual Report 2020
Invested capital
Invested capital = Total equity + interest-bearing liabilities
Return on invested capital (ROI), %
Return on invested capital is one of the most important key ratios. It measures the relative profitability of the
company, ie. the yield on the capital invested in the company.
Return on invested capital (ROI), % =
Operating profit + financial income (rolling 12 months) x 100
Invested capital, quarterly average
EUR thousand
Total equity attributable to owners of the parent , ,
Interest-bearing liabilities , ,
Invested capital , ,
EUR thousand
Operating profit (rolling 12 months) , ,
Financial income (rolling 12 months)*
Total , ,
Invested capital December 31, 2019 / 2018 , ,
Invested capital March 31, 2020 / 2019 , ,
Invested capital June 30, 2020 / 2019 , ,
Invested capital September 30, 2020 / 2019 , ,
Invested capital December 31, 2020 / 2019 , ,
Average , ,
Return on invested capital (ROI), % . .
* Excluding fair value change
Reference
Consolidated statement
of financial position
Note17
Reference
Consolidated statement of profit or loss
Note30
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179Suominen Annual Report 2020 | Key ratios
Equity ratio, %
Equity ratio is an important key ratio as it measures the solidity of the company, the company’s tolerance for losses
and ability to cover its long-term commitments. The performance measure shows how much of the company’s
assets are financed with equity. The equity creates a buer against potential losses, and equity ratio represents the
level of this buer.
Equity ratio, % =
Total equity attributable to owners of the parent x 100
Total assets - advances received
Gearing, %
Gearing represents the ratio between the equity invested by the owners of the company and the interest-bearing
liabilities borrowed from financiers. Gearing is an important performance measure in assessing the financial position
of a company. A high gearing is a risk factor which might limit the possibilities for growth of a company and narrow
its financial freedom.
Gearing, % =
Interest-bearing net debt x 100
Total equity
EUR thousand
Total equity attributable to owners of the parent , ,
Total assets , ,
Advances received - -
, ,
Equity ratio, % . .
EUR thousand
Interest-bearing net debt , ,
Total equity attributable
to owners of the parent , ,
Gearing, % . .
Reference
Consolidated statement
of financial position
Consolidated statement
of financial position
Note22
Reference
Consolidated statement of financial
position
This is Suominen | Sustainability | Corporate Governance | Financial Information
180 Key ratios | Suominen Annual Report 2020
INFORMATION FOR SHAREHOLDERS
Financial calendar
Suominen will publish its Financial Statements
Release, Half Year Financial Report and two Interim
Reports in 2021 as follows:
February 4, 2021 Financial Statements Release
for 2020
April 28, 2021 Interim Report
for January–March 2021
August 13, 2021 Half Year Financial Report
for January–June 2021
October 27, 2021 Interim Report
for January–September 2021
The Annual General Meeting
Notice is given to the shareholders of Suominen
Corporation to the Annual General Meeting to be held on
Thursday March 25, 2021 at 10:00 a.m. at the company’s
headquarters at the address Karvaamokuja 2 B, Helsinki.
The Board of Directors of the company has resolved
on an exceptional meeting procedure based on the
temporary legislation approved by the Finnish Parliament
on September 15, 2020 (the “Temporary Act”). In order to
limit the spread of the COVID-19 pandemic, the Annual
General Meeting will be held without shareholders’ or
their proxy representatives’ presence at the Meeting
venue. This is necessary in order to organize the Annual
General Meeting in a predictable way while taking
into account the health and safety of the company’s
shareholders, personnel and other stakeholders.
Notice to the Annual General Meeting has been
announced as a stock exchange release on February 4, 2021.
All materials to the Annual General meeting are available
on the company’s website www.suominen.fi/en/agm
Each shareholder, who is registered on the record
date of the General Meeting on March 15, 2021 in the
shareholders’ register of the company held by Euroclear
Finland Ltd, has the right to participate in the General
Meeting. A shareholder, whose shares are registered on
his/her personal Finnish book-entry account, is registered
in the shareholders’ register of the company.
Registration for the meeting and advance voting begins
on February 16, 2021, when the deadline for delivering
counterproposals has expired and the company has
published the possible counterproposals to be put to a
vote on the company’s website. A shareholder entered
in the company’s shareholders’ register, who wishes to
participate in the General Meeting, must register for the
General Meeting and vote in advance on March 22, 2021
at 10:00 a.m. at the latest, by which time the notice of
participation and the votes must be received.
Shareholders with a Finnish book-entry account can
register and vote in advance on certain items on the
agenda during the period February 16, 2021 – March 22,
2021 at 10:00 a.m. by the following manners:
a) On the company’s website www.suominen.fi/en/agm
Electronic registering and voting in advance
require for natural persons the shareholder’s or its
proxy representative’s, and for legal persons, its
representative’s or proxy holder’s strong electronic
identification (Finnish or Swedish online banking codes
or the Mobile ID).
b) By regular mail or e-mail
A shareholder voting in advance by regular mail or
e-mail must deliver an advance voting form available
on the company’s website www.suominen.fi/en/agm
or corresponding information to Innovatics Oy by
regular mail to Innovatics Oy, Yhtiökokous / Suominen
Corporation, Ratamestarinkatu 13 A, 00520 Helsinki,
Finland or by e-mail to agm@innovatics.fi.
If a shareholder participates in the General Meeting
by delivering votes in advance by regular mail or e-mail
to Innovatics Oy, the delivery of the votes before the
deadline for delivering the notice of participation and
the votes has expired shall constitute a registration for
the General Meeting provided that information required
for registration set out in the advance voting form is
provided.
This is Suominen | Sustainability | Corporate Governance | Financial Information
181Suominen Annual Report 2020 | Information for shareholders
A shareholder must in connection with the
registration submit the requested information, such
as the shareholder’s name, personal ID and e-mail
address and/or phone number. Personal data disclosed
in connection with the shareholders’ registration will be
used only in connection with the General Meeting and
the thereto related necessary handling of registrations.
Instructions regarding the voting are available
to all shareholders on the company’s website
www.suominen.fi/en/agm. Additional information
and technical support for electronic registration is also
available by telephone at +358 10 2818 909 (business
days at 9:00 a.m. – 12:00 and 13:00 p.m. – 16:00 p.m.).
Investor relations
Emilia Peltola, Vice President,
Communications & IR
tel. +358 10 2143082
emilia.peltola@suominencorp.com
Request for management appointments:
Eeva Oinonen, Executive Assistant
and PA to President and CEO
tel. +358 10 214 3551
eeva.oinonen@suominencorp.com
Proposal on distribution of funds
The Board of Directors proposes that a dividend of
EUR0.10 per share shall be distributed for the financial year
2020 and that the profit shall be transferred to retained
earnings. In addition, the Board of Directors proposes, that
in addition to the dividend, a return of capital of EUR0.10
per share shall be distributed for the financial year 2020
from the reserve for invested unrestricted equity.
The record date is March 29, 2021 and the dividend and
return of capital would be paid on April 8, 2021.
Silent period
Suominen observes a 30-day silent period prior to the
publication of financial results. During this time, Suominen
does not comment on the company’s financial situation,
markets or outlook, and neither do Suominen’s executives
or employees meet with representatives of capital markets
or financial media.
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182 Information for shareholders | Suominen Annual Report 2020
