Hello all Inderes TV viewers. Suominen is planning a rights issue, and we're talking about that today with the company's CEO, Charles Héaulmé. Hello Charles.

Good afternoon everyone.

Charles, you just today decided the authorization for your rights issue, basically for 20 million, which was the planned amount, so can you explain to the investors why Suominen is doing this rights issue, basically, and what kind of other financing solutions you perhaps considered.

Yes. Suominen, as we explained in previous sessions, and particularly at the end of January, Suominen is at a turning point. We have launched a three-year profitability improvement program at the end of January that basically started in the year, and we call it our Full Potential program. The rights issue has been considered as the best way to finance this program, but also to strengthen our financial position. We have of course analyzed all alternatives, and we concluded that the rights issue was the solution allowing our shareholders to maintain ownership and increase even engagement and participate in the transformation of the company. It is excellent in engaging with investors and shareholders in the long run, and I want to take the opportunity to really mention that the support of our two anchor shareholders, Ahlström and Etola, has been also a reassurance of their long-term commitment.

You mentioned this Full Potential program. We talked about it also in the previous quarterly interviews, but perhaps you can kind of recap what are the main points and the timeline for that program.

So what we say is that we would like to see the strategic development of the company in two phases: first a phase where we are focusing on resetting the profitability of the company, and then in the second phase, more towards the end of the decade, we would be looking into scaling the company, but first get the foundations right before thinking about scaling the company. So that's the concept of this Full Potential program, where our target is to reach 10% profitability margin within the next couple of years. So that's what we say in broad terms.

This target, this program, is basically guiding all our execution on a daily basis now. Regarding what it consists of, basically the Full Potential program for Suominen is based on four pillars. The first one is to improve the operational performance, and I would say in a comprehensive way, where we will uncover all stones from procurement, fixed cost, production, commercial excellence, manufacturing operations efficiency, continuous improvement. All of it will be in this first pillar. Second pillar of the Full Potential frame is to implement a few targeted I would call them low-risk investments that are aiming at enhancing the profitability of the company, and the third is about implementing some structural measures improving the cost competitiveness and overall profitability of Suominen.

That is very clear. Like you mentioned, actually quite a big part of the proceeds from the rights issue will go to this kind of capex regarding the program and the investments, and actually if I estimate correctly, your net debt will not go down that much compared to the current situation, which means it is still quite high compared to at least the current earning level. So how do you see that, and are you kind of planning to drive down the debt further, or are you kind of hoping to improve the metrics through earnings improvement, or where are you on that?

You're totally right. One of the aspects of this rights issue is to fund the transformation program, that is very clear, but it is not the only objective. The second objective is to strengthen also our financial position and with this improve immediately the leverage of the company, which is too high. At the end of quarter one it was in the range of seven times. Net debt ratio versus EBITDA, to the point of this rights issue. It will actually be allocated in a relatively balanced way between strengthening the balance sheet and funding the Full Potential program, and that will mean that the leverage of the company will be improved, but also it will be improved further from the increase in the EBITDA that we will deliver over time when this Full Potential program unfolds and translates into clear, tangible improvements in EBITDA.

You haven't disclosed yet the timeline or the details of the rights issue, but I guess that should be coming up in the very near future, or would you like to?

It will be. It will be coming according to market conditions and legal requirements. It will be coming after this approval of the AGM this morning, and the subscription period will most likely expand towards the end of June. The exact terms and conditions will be published very shortly.

Let's look out for that one, and then finally, we talked about the outlook and this year also a month ago in the quarterly interview, but is there anything new to comment regarding the market, and perhaps if you can remind also the investors what's the basis of your guidance of improving earnings for this year, given that Q1 was below the comparison period.

Yes, so the market conditions and outlook haven't changed. The market conditions are, as we have said at the end of quarter one, well early May when we released the Q1 results, relatively solid growth in some categories like the moist toilet tissue particularly in the US, and a more flat to small growth in the rest of the wipes categories. Our forecast hasn't changed over the last month, and since we reported our Q1 results, we expect EBITDA in 2025 to improve compared to the 3% that were reported in 2024. This will come from the first improvement that our plan benefits in the Full Potential program should allow already in 2025, this being said first. The forecast will be revised as we go and as the year is progressing. Second, as we always say, the most important part of the Full Potential program we see the improvements coming out in 2027 and 2028.

That is right. All right, thank you very much Charles for the interview. Let's come back to this after the Q1 results.

Excellent, thank you Rauli.