Suominen at Mid Small Cap Forum with Lond Capital

Suominen Corporation as an investment

30 June 2016

Tapio Engström, CFOAnu Heinonen, VP, Corporate Communications & IR

Our purpose is to make nonwovens continuously better for people.

Contents

• Suominen at a glance• Nonwovens markets• Strategy for 2015 – 2017 and its implementation

- Progress on mid-term financial targets

• Key elements of profitability

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Suominenat a glance

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Indicative customers

Our operations, customers and end users

4

Suominen End use applications

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Recent history: Determined progress towards growth

5

2012 – 2014Putting the house

in order

2015 – 2017:Heading to

organic growth

2018 Future Suominen

Cost cuttingRestructuringReorganizingRefinancing

Net sales 356.9 M€Gearing 101.0%

Growth strategyInvestment programFocus on products withhigher value addedStronger R&D

Net sales 444.0 M€Gearing 25.9%

Net sales at theend of 2017: ~500 M€

6/30/2016


Eight nonwovens plants in three continents serving both business areas

Two business areas – Convenience and Care

6

93% of Suominen’s net sales 7% of Suominen’s net sales

• Main end use areas:- Hygiene products (femcare,

incontinence, diapers)- Medical nonwovens (e.g. swabs,

undercast pads, surgical drapes and masks)

• Net sales of the business area (2015) 32.4 M€

• Main end use areas:- Wiping (baby, household,

personal care , industrial wipes

- Travel & catering applications

• Net sales of the business area (2015): 411.5 M€

Convenience Care

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Locations in three continents close to customers

Green Bay, WI, USA

Windsor Locks, CT, US

Bethune, SC, US

Paulínia, Brazil

Alicante, Spain

Mozzate, Italy

Nakkila, Finland

Cressa, Italy

Helsinki, Finland (Head office)

Sales representatives present in several locations in Asia Pacific

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Nonwovensmarkets

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

USA Europe

-4%

-2%

0%

2%

4%

6%

8%

10%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

GDP Nonwoven demand

In Europe, GDP growth is for euro area.

For nonwovens demand, the graphs illustrate the change in the value (USD) of nonwoven demand.

-10%

-5%

0%

5%

10%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

GDP Nonwoven demand

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We are the global leader in nonwovens for wipes

Suominen #1Wiping ~2.1 billion euros

Other key producers• Kimberly-Clark• Jacob Holm• Sandler• Berry Plastics (ex-

AVINTIV)

Suominen ~20%

Global nonwovens market totaling ~26 billion euros

Other key producers• Kimberly-Clark• Berry Plastics (ex-AVINTIV)• Fiberweb• First Quality Nonwovens• Pegas Nonwovens

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

Upholstery10%

Other 27%

Building/roofing7%

Filtration9%

Floor coverings6%

Automotive5%

Wiping8%

Medical3%

Hygiene25%

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Demand for Suominen nonwovens is expected to grow globally, driven by several megatrends

+2%

+7%

+2–6%

+7%+8%

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

Aging populationEveryday convenienceHealth and well-being trends

Growing population and middle class

Growing population and middle class

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GDP per capita

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

12

Household wipes

Incontinence products

Baby wipes

Disposable diapers

Feminine care products

USD 14 000+

USD 7 000+

USD 10 000+

USD 4 000+

USD 1 000+

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We hold the leading market position in Convenience,still a challenger Care

13

TOP10 #1 Challenger

in nonwovens for medical & hygiene products(Care business area)

Global market leaderin nonwovens for wipes(Conveniencebusiness area)

Ninth-largestof all nonwovens suppliers globally

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Strategy for 2015-2017

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Suominen’s strategy 2015–2017

15

Market Driven Product LeaderVision

Business strategy

1. Deliver superior value in thoughtfully selected market applications.

2. Drive proactive key account management. 3. Execute demand driven supply chain. 4. Evolve culture and capabilities to build strong product

company.

Our purpose is to make nonwovens continuously better for peoplePurpose

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In this strategy period, we aim at growth and clear shift in product portfolio

40%

17%

11%

22%

7%

2015 (Total net sales 444.0 M€)

Baby wipingHousehold wipingWorkplace wipingPersonal care wipingMedical and hygiene products

2017 (approx. 500 M€)

Illustrative.

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Understanding the end user needs isat the heart of our strategy

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Strategy implementation

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Suominen’s strategy 2015–2017

19

Market Driven Product LeaderVision

Business strategy

1. Deliver superior value in thoughtfully selected market applications.

2. Drive proactive key account management. 3. Execute demand driven supply chain. 4. Evolve culture and capabilities to build strong product

company.

Our purpose is to make nonwovens continuously better for peoplePurpose

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Deliver superior value in selected market applications

Key activities in delivering superior value

20

~60 M€ growth investment program, initiatives on three continents

Product development process enhanced

Six new products launched

1

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The growth investment program now focusing onthe Bethune investment

Plant Estimatedvalue

Installed during

Bethune approx. EUR50 million H2/2016

Alicanteapprox. EUR

4 million 2015Nakkila

Paulínia

To be confirmed

approx. EUR 6 million

21

Bethune, SC, USA

Paulínia, Brazil

Alicante, Spain

Nakkila, Finland

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Product Development function enhanced determinedly

22

Enhancing capabilities

• Innovation process,“Suominen Innovation Machine”- Front End Innovation- Creating a prioritized

project portfolio - Introduction of formal

gate process for running projects

Enhancing capacity

• Creating critical mass- R&D expenditure to

increase to above 1% of net sales (0.8% in 2015)

- Four new people employed in 2015, two of them PhDs

- Centralizing resources

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Our purpose is to make nonwovens continuously better for people. 23

Six new products launched in 2015Five for Care, one for Convenience business

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Drive proactive key account management for mutual value creation

Key activities by focus area

24

Creating value together with customer by, for example, organizing events

Listening to the customer: Utilizing the Customer Perception Survey results

2

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Execute demand driven supply chain


25

Defining and implementing standardized global processes

3

Comprehensive ICT systems renewal –aim at an efficient, global supply chain

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Evolve culture and capabilities to build strong product company


26

4

Pivotal recruitments building new and enhanced capabilities in several areas

Strategic sustainability initiatives in progress, e.g., blind recruiting

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Progress in strategic sustainability initiatives

Implementation of the Supplier Code of

Conduct

Product sustainabilityreview

Non-Discrimination and Equal

Opportunities Program: Blind hiring

and salary study

Material and resource efficiency: Among other things, water

and energy efficiency improved

Achievingproduct leadership

Fostering responsibilitythroughout the value chain

Operating sustainablythroughout the organization

4

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5,0 %

12,4 %

15,7 % 15,9 %14,7 %

0%

5%

10%

15%

20%

2012 2013 2014 2015 Q1/2016

ROI, %

6,9 %

3,5 %

0,8 %

0%

2%

4%

6%

8%

10%

12%

2013 2014 2015

Organic net sales growth, %

101 % 96,2 %

34,7 %25,9 %

28,6 %

0%

20%

40%

60%

80%

100%

120%

2012 2013 2014 2015 Q1/2016

Gearing, %

Progress on mid-term financial targets

• Net sales growth compared to previous year.

• Target level marked with dashed line.

• Figures are of continuing operations.

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Key elements of profitability

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Portfolio change drives top line growth

40%

17%

11%

22%

7%

2015 (444.0 M€) 2017 (~500 M€)

Illustrative.

• Portfolio change is increasing the share of higher value added products in our portfolio

• Envisioned healthy volume growth supports the profitability development

47%

19%

10%

18%

6%

2012 (357.9 M€)

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

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9,0%10,7%

12,4% 13,1%

0%

3%

6%

9%

12%

15%

2012 2013 2014 2015

Gross profit, % of net sales

Positive development in gross profit, SGA costsand operating profit

31

6,6%6,0% 5,8% 5,7%

0%

2%

4%

6%

8%

2012 2013 2014 2015

SGA, % of net sales

*Excluding non-recurring items

4,2%5,2%

6,7% 7,0%

0%

2%

4%

6%

8%

2012 2013 2014 2015

Operating profit*, % of net sales

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Raw materials – The logic

• Roughly 60–70% of costs are raw materials.

• As one of the largest nonwovens producers in the world, we maintain long relationships with key suppliers.

• Contracts covering ca. 50% of our net sales include a pass-through clause.

• Between raw materials for fibers and the final fiber, there are intermediate steps and in that value chain market dynamics are in play.

• Raw materials are not hedged as correlations are not predictable.

32

30%

23%23%

21%

3%

Viscose Pulp Polypropene* Polyester Other* Including sourced PP Spunbond.

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EUR/USD – A factor to pay attention to

• We have estimated that 10% change in EUR/USD exchange rate should have, based on the current business structure, on a full year basis, approximately 2.5 MEUR effect on operating profit.

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Financial reviewQ1 2016

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Net sales declined by 7.2%

Net sales, EUR million Net sales, EUR million

98,4 95,3103,3104,8111,9112,9114,9 104,2 103,9

0

20

40

60

80

100

120

140

356,9 373,7401,8

444,0,0

0

100

200

300

400

500

2012 2013 2014 2015

• Net sales decreased from the comparison period to EUR 103.9 million. Demand was not at the same level as in the comparison period. This also affected the competitive situation.

• Net sales were affected by both decreased sales volumes and lower sales prices in approximately equal proportions.

• We saw signs of improvement in demand already towards the end of the review period.

Continuing operations. Continuing operations.

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Proportion of sales of products withhigher added value grew

41%

22%

15%12%

8%

38%

25%

18%

10% 8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16 Q1/15 Q1/16

Typically higher value-added products

Baby wipes Personal care wipes Household Workplace Hygiene and medical products

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6,5 % 5,8 %

5.0 %

5,9 %

6,5 %

8,8 % 8,5 %

4,1 %5,3 %

0%

2%

4%

6%

8%

10%

0

2

4

6

8

10

Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16

EUR million %

Operating profit decreasedfrom the comparison period

Operating profit excl. NRI, EUR million and % Operating profit excl. NRI, EUR million and %

• Operating profit decreased by 24.0% and amounted to EUR 5.5 million.• Lower sales volumes and decrease in gross profit affected operating profit. There was no material

effect of US dollar exchange rate fluctuation on operating profit during the first quarter.

Continuing operations.

4,2 %

5,2 %

6,7 % 7,0 %

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

5

10

15

20

25

30

35

2012 2013 2014 2015EUR million %

Continuing operations.

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Profit for the reporting periodremained more or less unchanged

Profit for the reporting period, EUR million Profit for the reporting period, EUR million

2,62,2

0,6

4,8

3,5

6,2

5,4

1,9

3,4

0

1

2

3

4

5

6

7

-2,8

5,7

10,2

17,0

-5

0

5

10

15

20

Continuing operations. Continuing operations.

2012 2013 2014 2015

• Profit for the reporting period was strengthened mainly by lower financial expenses.

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Statement of profit or loss

EUR thousands 1-3/2016 1-3/2015 1-12/2015Net sales 103,869 111,934 444,042Cost of goods sold -92,077 -97,547 -386,042Gross profit 11,792 14,387 58,000Other operating income 629 950 2,637Sales and marketing expenses -1,758 -1,902 -7,760Research and development -837 -851 -3,527Administration expenses -4,339 -4,681 -16,709Other operating expenses 55 -611 -862Operating profit 5,543 7,292 31,778Net financial expenses -244 -1,621 -5,302Profit before income taxes 5,299 5,671 26,476Income taxes -1,858 -2,188 -9,456Profit for the period 3,441 3,482 17,020

Gross profit didnot reach the levelof the comparisonperiod

Cost structurecontinues on ahealthy level

Fluctuations in exchange rates decreased the financial items markedly below the level of the comparison period

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Statement of financial positions, assets

EUR thousands 31.3.2016 31.3.2015 31.12.2015Non-current assetsGoodwill 15,496 15,496 15,496Intangible assets 13,411 12,598 13,275Property, plant and equipment 94,173 92,197 97,931Loan receivables 7,793 8,202 7,793Available-for-sale assets 777 1,113 777Held-to-maturity investments − 433 −Other non-current receivables 2,442 2,518 2,402Deferred tax assets 4,529 5,276 4,491Total non-current assets 138,621 137,833 142,165

Current assetsInventories 31,816 30,914 32,557Trade receivables 52,151 60,599 51,547Loan receivables 1,000 600 1,000Other current receivables 5,183 4,108 7,038

Assets for current tax1,892 1,381 1,874

Cash and cash equivalents 53,065 38,036 55,570Total current assets 145,107 135,639 149,585

Total assets 283,728 273,472 291,750

Elevated cash.Payments in our growth investment program will bring cash level closer to normal

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Statement of financial positions, equity and liabilitiesEUR thousands 31.3.2016 31.3.2015 31.12.2015Share capital 11,860 11,860 11,860Share premium account 24,681 24,681 24,681Reserve for invested unrestricted equity 69,652 69,572 69,652Treasury shares -44 -44 -44Fair value and other reserves 500 14 -118Exchange differences 1,660 8,216 5,097Other equity -4,775 -15,901 -3,076Total equity attributable to owners of the parent 103,534 98,398 108,052

Hybrid bond 17,272 16,653 17,664Total equity 120,806 115,051 125,716LiabilitiesNon-current liabilitiesDeferred tax liabilities 10,411 9,832 10,890Liabilities from defined benefit plans 1,105 1,151 1,105Other non-current liabilities 258 1,303 651Debentures 75,000 75,000 75,000Other non-current interest-bearing liabilities 18,058 6,667 18,498Total non-current liabilities 104,831 93,953 106,144Current liabilitiesCurrent interest-bearing liabilities 3,318 3,333 3,363Liabilities for current tax 764 941 47Trade payables and other current liabilities 54,010 60,194 56,479Total current liabilities 58,092 64,468 59,889Total liabilities 162,923 158,421 166,034Total equity and liabilities 283,728 273,472 291,750

Payment of dividend the only notable transaction

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Cash flow from operations doubledfrom the comparison period

Cash flow from operations, EUR million Cash flow from operation, EUR million

-0,4

11,3

16,9

9,3

4,5 3,9

7,9

11,09,1

-202468

1012141618

24,921,3

37,1

27,3

0

5

10

15

20

25

30

35

40

2012 2013 2014 2015

• Cash flow from operations was mainly improved due to a decrease in paid financial items as well as positive change in working capital

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Statement of cash flows (1/2)

EUR thousands 1-3/2016 1-3/2015 1-12/2015

Cash flow from operationsProfit / loss for the period 3,441 3,482 17,020Total adjustments to profit / loss for the period 6,852 8,319 32,870Cash flow before changes in net working capital 10,292 11,802 49,890Change in net working capital 1,368 -107 -7,921Financial items -1,828 -5,317 -6,425Income taxes -714 -1,886 -8,269Cash flow from operations 9,118 4,493 27,274

Cash flow from investments

Investments in property, plant and equipment and intangible assets -3,849 -1,664 -22,369

Cash flow from disposed businesses − − 167

Sales proceeds from property, plant and equipment and intangible assets − 10 10

Cash flow from investments -3,849 -1,654 -22,192

Improved cash flow from operations attributable toall components

Investmentscontinued

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Statement of cash flows (2/2)

EUR thousands 1-3/2016 1-3/2015 1-12/2015

Cash flow from financingDrawdown of other non-current interest-bearing liabilities − − 15,000

Repayment of other non-current interest-bearing liabilities − − -3,333

Changes in current interest-bearing liabilities − -14 -14Changes in loan receivables − − 600Share issue − 340 340Paid interest on hybrid bond -624 − −Dividend distribution / distribution of funds -5,030 -2,504 -2,504Cash flow from financing -5,654 -2,177 10,089

Change in cash and cash equivalents -385 662 15,171

Cash and cash equivalents at the beginning of the period 55,570 38,430 38,430

Effect of changes in exchange rates -2,120 -1,056 1,968Change in cash and cash equivalents -385 662 15,171Cash and cash equivalents at the end of the period 53,065 38,036 55,570

Strong cash flow covered both the investments and the payment of dividend

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Outlook for 2016 remains unchanged

• Suominen expects that for the full year 2016, its net sales and operating profit excluding non-recurring items will improve from year 2015.

• In 2015, Suominen’s net sales amounted to EUR 444.0 million and operating profit excluding non-recurring items to EUR 31.2 million.

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Summary: Suominen as an investment

Promising track record, solid financial position

Ambitious growth scenario –net sales to 500 M€ in 2017

Growth investment program: Financial position secures the execution

Dividends form an important elementin the creation of shareholder value

46

~30%Payout ratio

~60M€

500M€

28.6%Gearing

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Thank you!

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Suominen at Mid Small Cap Forum with Lond Capital

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