Financial implications of Changemaker strategy. Presentation by Tapio Engström, Chief Financial Officer of Suominen. Held in Suominen Capital Markets Day on 10 May 2017.

1. Changemaker strategy
and its financial implications
Tapio Engström, CFO
10 May 2017

2. Our purpose is to make life better.
Recent history &
current status
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3. Our purpose is to make life better.
Determined progress towards growth
2012 – 2014
Putting the house
in order
2015 – 2017
Heading to
organic growth
2017 – 2021
Changemaker
strategy
Cost cutting program
Restructuring
Reorganizing
Refinancing
In 2012:
Net sales 356.9 M€
Operating profit* 14.9 M€
Gearing 101.0%
Investment program
Focus on products with
higher value added
Stronger R&D
From 2012 to 2016:
Net sales +17%
Operating profit* +72%
Gearing to 39.6%
TSR 100%
At the end of 2021:
Net sales >600 M€
Operating profit
> 10% of net sales
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Continuing operations.
*Operating profit:
Comparable / excl. Non-recurring items

4. Our purpose is to make life better.
Past financial performance
5/10/2017
2012-2014: Figures refer to continuing operations.
Operating profit is comparable/excl. non-recurring items
356.9 373.7
401.8
444.0
416.9
0
50
100
150
200
250
300
350
400
450
500
2012 2013 2014 2015 2016
Net sales,
MEUR
14.9
19.4
26.9
31.2
25.6
0
5
10
15
20
25
30
35
2012 2013 2014 2015 2016
Operating profit,
MEUR
24.9
21.3
37.1
27.3 28.5
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015 2016
Cash flow
from operations, MEUR
4

5. Our purpose is to make life better.
Development of the financial position
5/10/2017
101.0
%
96.2 %
34.7 %
25.9 %
39.6 %
0%
20%
40%
60%
80%
100%
120%
2012 2013 2014 2015 2016
Gearing, %
5.0 %
12.4 %
15.7 % 15.9 %
11.6 %
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2012 2013 2014 2015 2016
Return on investment, %
5.3
4.4
7.1
23.7
53.3
0
10
20
30
40
50
60
2012 2013 2014 2015 2016
Capital expenditure, MEUR
2012-2014: Figures refer to continuing operations.
5

6. Our purpose is to make life better.
Growth investment program targeted to
attractive markets
Location Applications Market
growth*
Competitive
situation
Bethune, SC, USA Home wiping +7% (NA) Balanced
Flushables +9% (NA) Tightening
Workplace wiping +5-7% Balanced
Paulínia, Brazil
Medical +3-9 % Emerging market
Alicante, Spain
Workplace wiping
+5-7%
Balanced
*Estimates based on third party forecasts and management analysis, reflecting averages.
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7. Our purpose is to make life better.
Financial impacts
of the strategy
for 2017-2021
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8. Our purpose is to make life better.
Portfolio change
High value add
applications
allow higher
pricing
Added and
upgraded capacity
More tons for
higher value add
applications
Location Applicatio
ns
Marke
t
growt
h*
Competitiv
e situation
Bethune,
SC, US
Home
wiping
+7%
(NA)
Balanced
Flushables
+9%
(NA)
Tightening
Workplace
wiping
+5-7% Balanced
Paulínia, BR
Medical
+3-9
%
Emerging
market
Alicante, SP Workplace
wiping
+5-7%
Balanced
How to exceed EUR 600 million in net sales?
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Net sales growth at a rate that doubles the market average
Over EUR 600 million in 2021
Potential
geographical
expansion
8

9. Our purpose is to make life better.
Baby wiping 2-7%
Personal care wiping 6-65%
Home wiping 2-7%
Workplace wiping 3-5%
Medical 3-9%
Hygiene 0-6%
About the importance of the portfolio transformation
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Targeted net sales breakdown in 2021Growth estimates by application
”Growth”
”Lean”
Indicative.
9

10. Our purpose is to make life better.
How to reach the desired level of profitability?
6.1%
over 10%
2016 Higher value add Enhanced
capacity
SGA costs / sales 2021
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Components of the raising operating profit margin (indicative)
10

11. Our purpose is to make life better.
Annual investment level in 2017-2021
excluding potential inorganic growth
5/10/2017
For maintenance For competitive edge Capital expenditure
~1%
of annual net
sales
Add-on
investments
~12 M€
annually
11

12. Our purpose is to make life better.
Financial targets 2017-2021
5/10/2017
356.9 373.7
401.8
444.0
416.9
0
100
200
300
400
500
600
2012 2013 2014 2015 2016
Net sales, MEUR
101.0
% 96.2 %
34.7 %
25.9 %
39.6 %
0%
20%
40%
60%
80%
100%
120%
2012 2013 2014 2015 2016
Gearing, %
5.0 %
12.4 %
15.7 % 15.9 %
11.6 %
0%
5%
10%
15%
20%
2012 2013 2014 2015 2016
Return on investment, %
During the five-year strategic period, Suominen aims at strong and
profitable net sales growth and solid financial position.
Target level marked with orange.
12

13. Our purpose is to make life better.
Updated dividend policy
• Previously, the policy was to
distribute approximately 30% of the
profit for the period in annual
dividends.
• In assessing its proposal for the
payment of dividends, the Board will
also consider Suominen’s future
investment needs and the solidity of
its financial position.
5/10/2017
0.19
0.32
0.29
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
2014 2015 2016
EPS DPS
EPS and DPS*, EUR
0.05
0.10 0.11
• According to the updated policy, Suominen aims to distribute
at least 30% of its profit for the period in annual dividends.
13

14. We change the way
people
think about nonwovens.
Thank you!
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15. Our purpose is to make life better.
Appendix
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16. Our purpose is to make life better.
Hybrid bond
• In February 2014, Suominen issued a convertible hybrid bond of
EUR 17.5 million.
• The holders of the bond notes are entitled to convert the notes and
the potential accrued capitalized interest related to the notes into
Suominen shares. The conversion period started on 11 February
2014 and will end on 10 February 2018.
• In February 2017, in total EUR 0.3 million of accrued interests were
capitalized.
• In March 2017, in total EUR 0.6 million of interests on hybrid bond
were paid in connection with the payment of the dividend.
• The number of shares in Suominen may increase in total by
maximum of 6,763,360 shares on the basis of the conversion of the
remaining bond notes and the potential capitalized interest.
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