This document summarizes Suominen's strategy to become a Market Driven Product Leader from 2015-2017. Key elements of their strategy include:
1) Investing over 60 million euros in growth initiatives across three continents to deliver superior value in selected market applications.
2) Driving proactive key account management and creating value with customers through initiatives like customer perception studies.
3) Executing a demand driven supply chain through defining standardized global processes and a comprehensive ICT systems renewal.
4) Evolving their culture and capabilities through pivotal hires to build new skills and a non-discrimination program.
Capital Markets Day 2015, Nina Kopola, President & CEO on Nov 11
1. The first leg of our path
to become a
Market Driven Product Leader
Capital Markets Day, 11 November 2015
Nina Kopola, President & CEO
2. Our purpose is to make nonwovens continuously better for people.
Suominen
in brief
11/11/2015 2
401.8
net sales
in 2014
M€
Nonwovens
as roll goods
for wiping,
hygiene and
medical
products
Successful
turnaround
achieved,
solid financial
position
Ambitious
growth
strategy to
be executed
Operations
on three
continents,
close to
customers
Some
600
employees
3. Our purpose is to make nonwovens continuously better for people.
Our business
11/11/2015 3
Global consumer
brands
Private label
suppliers
Healthcare
product
suppliers
Regional
converters
Retailers
Customers
Eight plants on
three
continents
serve both
business areas
and create
competitive
edge
Production
Viscose, pulp,
polypropene,
polyester
All purchased
from the
market
Approximately
50% pulp-
based
Raw materials
Convenience
Wipes for baby &
personal care,
household and
workplace use;
travel & catering
Care
Medical products,
like swabs;
hygiene products,
like femcare &
adult incontinence
End use applications
4. Our purpose is to make nonwovens continuously better for people.
Fast transformation into a nonwovens company with
operations on three continents
11/11/2015
Net sales by line of business and geographical coverage from 2011 to date.
2011
Three lines of
business:
Nonwovens
Flexibles
Codi Wipes
11/1/2011
Ahlstrom
Home and Personal
acquisition
7/15/2013
Divestment of
Codi Wipes
2/10/2014
Acquisition
of Brazilian unit
7/14/2014
Divestment of
Flexibles
business area
4
5. Our purpose is to make nonwovens continuously better for people.
Leading market position in Convenience,
opportunities for growth in Care
11/11/2015 5
#9 #1 Challenger
in nonwovens for
medical & hygiene
products
(Care business area)
in nonwovens
for wipes
(Convenience
business area)
of all nonwovens
suppliers globally
6. Our purpose is to make nonwovens continuously better for people.
In medical and hygiene, Suominen’s target market is
over 2 billion euros
Global nonwovens market totaling ~26 billion euros
Upholstery
10%
Other
27%
Building/roofing
7%
Filtration
9%
Floor coverings
6%
Automotive
5%
Wiping
8%
Medical
3%
Hygiene
25%
11/11/2015 6
7. Our purpose is to make nonwovens continuously better for people.
Core of Suominen’s strategy 2015–2017
7
Market Driven Product Leader
Vision
Business strategy
11/11/2015
1. Deliver superior value in thoughtfully selected market
applications.
2. Drive proactive key account management.
3. Execute demand driven supply chain.
4. Evolve culture and capabilities to build strong product
company.
Our purpose is to make nonwovens continuously better for people
Purpose
7
8. Our purpose is to make nonwovens continuously better for people.
Sustainability agenda 2015–2017
Long-term relations
with customers &
suppliers
Supplier Code of
Conduct
Suominen’s purpose
Innovation
Development of
sustainable
products
Competence
development
Non-discrimination
Material & resource
efficiency
Achieving
product leadership
Fostering responsibility
throughout the value chain
Operating sustainably
throughout the organization
11/11/2015 8
9. Our purpose is to make nonwovens continuously better for people.
In this strategy period, we aim at growth and shift in
product portfolio
41%
15%
12%
22%
8% 2%
2014 (401.8 M€)
Baby wiping
Household wiping
Workplace wiping
Personal care wiping
Medical and hygiene products
2017 (approx. 500 M€)
Illustrative.
11/11/2015 99
10. Our purpose is to make nonwovens continuously better for people.
First leg – 2015
11/11/2015 10
11. Our purpose is to make nonwovens continuously better for people.
0.9
1.2
1.5
1.61
0
0.5
1
1.5
2
Q3/2014 Q1/2015 Q2/2015 Q3/2015
GDP in Euro area Q4/14–Q3/15
Forecast
2.5
2.9
2.7
2
0
0.5
1
1.5
2
2.5
3
3.5
Q3/2014 Q1/2015 Q2/2015 Q3/2015
GDP in US Q4/14–Q3/15
Positive trend in market indicators
11/11/2015 11
-11.3
-6.3
-5.3
-7.1
-12
-10
-8
-6
-4
-2
0
Q4/2014 Q1/2015 Q2/2015 Q3/2015
Consumer Confidence Indicator in
Euro area Q4/14–Q3/15
89.8
101.4 101.4
103
88
93
98
103
Q4/2014 Q1/2015 Q2/2015 Q3/2015
Consumer Confidence Indicator in US
Q4/14–Q1/15
% %
12. Our purpose is to make nonwovens continuously better for people.
47%
17%
19%
10%
6%
Baby wiping Personal care wiping Household wiping Workplace wiping Medical & hygiene products
Q1–Q3 2012: 273.0 M€
40%
22%
17%
12%
8%
Q1–Q3 2014: 297.0 M€
Portfolio transformation in progress
11/11/2015 12
40%
24%
17%
12%
7%
Q1–Q3 2015: 339.8 M€
13. Our purpose is to make nonwovens continuously better for people.
4.7 %
7.5 %
14.4 %
0%
5%
10%
15%
20%
2012 2013 2014 Q3/15
Net sales growth, %
Solid financial development
Progress on mid-term financial targets
12.4 %
15.7 %
17.4 %
0%
5%
10%
15%
20%
2012 2013 2014 Q3/15
ROI, %
- Net sales growth compared with
previous year or the Q3 of previous
year.
- Target level marked with dashed line.
- Figures are of continuing operations.
n/a
10/26/2015 13
n/a
101.0 96.2
34.7 30.5
0
20
40
60
80
100
120
2012 2013 2014 Q3/15
Gearing, %
14. Our purpose is to make nonwovens continuously better for people.
Turnaround recognized also by the market
- In Q1–Q3, 35.3% of the average number of shares were traded in Nasdaq Helsinki.
- Market capitalization at the end of Q3 was EUR 274.1 million.
11/11/2015 14
2,300
2,800
3,300
3,800
4,300
4,800
0
50
100
150
200
250
300
350
Number of shareholdersMarket value, MEUR
Market value, M€ (incl. shares held by Suominen) Number of shareholders
15. Our purpose is to make nonwovens continuously better for people.
Strategy
implementation
11/11/2015 15
16. Our purpose is to make nonwovens continuously better for people.
Suominen’s strategy 2015–2017
16
Market Driven Product Leader
Vision
Business strategy
11/11/2015
1. Deliver superior value in thoughtfully selected market
applications.
2. Drive proactive key account management.
3. Execute demand driven supply chain.
4. Evolve culture and capabilities to build strong product
company.
Our purpose is to make nonwovens continuously better for people
Purpose
16
17. Our purpose is to make nonwovens continuously better for people.
Deliver superior value
in selected market
applications
Key activities by focus area
11/11/2015 17
~60 M€ growth investment program,
initiatives on three continents
Product development process
enhanced
Six new products launched
1
18. Our purpose is to make nonwovens continuously better for people.
State-of-the-art production line at Bethune plant
11/11/2015 18
Bethune,
SC, US
• The total value of the project will be close
to EUR 50 million.
• Andritz was selected as the main supplier
and integrator of the project.
• The investment will take the wetlaid
technology to a totally new level in the
industry.
• At first, the new production line will supply nonwovens for household and
workplace wiping as well as for flushable applications.
• The new line will be tailor-made, based on our unique nonwovens
technology expertise.
• The line is anticipated to be installed during the second half of 2016.
1
19. Our purpose is to make nonwovens continuously better for people.
• At Alicante and Paulínia, investments
expand the current product offering:
- To nonwovens for workplace wipes and
medical applications at Alicante
- To nonwovens for medical applications at
Paulínia.
• At Alicante and Paulínia, the investments will be
completed during 2015.
• At Nakkila, a production line was re-opened in
Q2/2015 to meet the improved demand in
Europe.
• The total value of the three investments is
approximately EUR 4 million.
11/11/2015 19
Adding capabilities
at Alicante, Paulínia and Nakkila plants
Nakkila,
Finland
Alicante,
Spain
Paulínia,
Brazil
1
20. Our purpose is to make nonwovens continuously better for people.11/11/2015 20
Creating world class product development1
Enhancing capabilities
• Building the innovation
machine
- Front End Innovation
- Creating a prioritized
project portfolio
- Introduction of formal
gate process for running
projects
Enhancing capacity
• Creating critical mass
- R&D expenditure to
increase to above 1% of
net sales (0.7% in 2014)
- Four new people
employed in 2015, two of
them PhDs
- Centralizing resources
21. Our purpose is to make nonwovens continuously better for people.11/11/2015 21
Six new products launched
Five for Care, one for Convenience business1
22. Our purpose is to make nonwovens continuously better for people.
Drive proactive key
account management for
mutual value creation
Key activities by focus area
11/11/2015 22
Creating value together with customer
Listening to the customer
2
23. Our purpose is to make nonwovens continuously better for people.
• Customer perception study was
conducted as base to understand the
main development points as well as
strengths.
• Will be utilized in developing account
management model.
11/11/2015 23
7.32
“Overall our relationship is solid. There
is a good amount of cooperation back
and forth. They are a valued and
important supplier in our business and
we see that for years to come.
Listening to the customer (Convenience)2
“… I would like to see added value
around innovations, new product
development, exclusive access and
technology. Those are benefits that I
know they give to other customers,
but I haven’t seen in with Suominen.”
24. Our purpose is to make nonwovens continuously better for people.
Agenda excerpts
• Trends and drivers in wipes markets
• Peek to the world of social media – We Love Wipes in action
• News from Suominen product portfolios
• Brief Introduction to Suominen SPC™ technology
• HYDRASPUN® Dispersible Plus – Performance and pleasure
• Sustainability - What does it mean to you? How does pulp producer view
sustainability.
- Speech and facilitation by Päivi Makkonen, Director, Metsä Group
• Tour at Cressa plant
11/11/2015 24
Creating value together with customers2
25. Our purpose is to make nonwovens continuously better for people.
Execute demand
driven supply chain
Key activities by focus area
11/11/2015 25
Defining and implementing
standardized global processes
3
Comprehensive ICT systems renewal
26. Our purpose is to make nonwovens continuously better for people.
Market
Driven
Product
Leader
Agile transformer
Global footprint
Innovative
Leadership for
excellence
Opportunity to
product
Demand to capability
Order to cash
ICT system
renewal
11/11/2015 26
Vision
Strategic
capabilities
Core
processes
Process framework
Standardized global processes at the core of
way of working3
27. Our purpose is to make nonwovens continuously better for people.11/11/2015 27
Key drivers
• Findings in process
harmonization project
• Current systems not fully
supporting new business
requirements
• Ambitious strategic
targets
₋ Vision to become
a market-driven
product leader
₋ Growth strategy
Targets
• Utilize industry best-
practices & strengthen
our lead in the strategic
areas
• Globally harmonized
processes, e.g. order and
account management
• Efficient supply chain
• Smooth interplant cross-
qualification
• Retain cost-conscious
way of working
ICT systems renewal: drivers and targets3
28. Our purpose is to make nonwovens continuously better for people.
Evolve culture and
capabilities to build strong
product company
Key activities by focus area
11/11/2015 28
4
Pivotal recruitments building new and
enhanced capabilities in several areas
Non-discrimination & equal
opportunities program launched
29. Our purpose is to make nonwovens continuously better for people.
Next steps towards our vision to be a
Market Driven Product Leader
11/11/2015 29
Drive through
the initiated
programs
Capitalize on
new investments
to drive growth
in chosen
applications and
markets
Intensify product
development
activities with
increased
number of new
product launches
ICT systems
renewal
Enhanced
focus on
Account
management
and
commercial
excellence
Further
development
of capabilities
for product
leadership
31. Our purpose is to make nonwovens continuously better for people.
Execution proceeds as planned on all fronts
2015
2016
2017
11/11/2015 1
Growth investment program in full speed
Focused actions in Business areas
Product development capability improvement
Bethune investment completed
ICT systems renewal
Enhanced account management
Net sales
in the vicinity of 500 M€
32. Our purpose is to make nonwovens continuously better for people.
Market Driven Product Leader
Suominen vision is to become a