Including the spunlace business recently acquired from Ahlstrom for the first time, Suominen reported a significant increase in total sales for the first period of 2012. The acquisition doubled the reported net sales but the comparable pro-forma sales declined compared to the first quarter of 2011. The company has started a large-scale pro-forma to exploit the potential benefits of the integration.
According to the company, Suominen generated net sales of €111.1 million in the first quarter compared to €43.6 million the prior year. Operating profit was €3.2 million compared to a €0.6 million loss last year.
“We improved our result substantially during the first quarter of the year—we achieved positive operating profit. The operating profit improved in both Wiping and Flexible Packaging segments. Our net sales more than doubled as a result of the acquisition of the Home and Personal division from Ahlstrom Corporation,” says president and CEO Nina Kopola. “Our first priority this year is to continuously improve profitability. This is why we have started an extensive program in nonwovens in order to attain all the synergy benefits and cost benefits. The target is to achieve cost savings of the order of about two percentage points on net sales.”
Suominen continued to integrate the Home and Personal business acquired from Ahlstrom Corporation into the Group. In addition to Suominen’s previous efficiency and cost-saving programs, a comprehensive assessment was started to realize the synergies and cost benefits related with the acquisition.
A clear profitability improvement is expected from the efficiency measures. Suominen has, over several years, achieved savings through rationalization and efficiency measures, amounting to approximately 2% of net sales. The measures started now also focus on improving the company’s profitability and aim at a similar level of cost benefits as previous measures, in relation to net sales.
Within the framework of the previously announced performance improvement program, Suominen is in the process of conducting negotiations that will affect all 166 employees at Suominen Nonwovens Ltd. The company has outlined a goal of reducing its staff numbers by 85, or more than half. The reductions will reportedly be made in all Suominen Nonwovens sites in North America, Italy, Spain, Brazil and Finland.
“We intend to strengthen our position as a global market leader in nonwovens,” says Kopola. “Therefore we must continuously streamline our operations and our ability to supply our customers with precisely what they need.”