Nonwovens / Technical Textiles
Suominen reports challenging first quarter
January–March 2023 in brief:
• Net sales increased by 6% and amounted to EUR 116.8 million (110.3)
• Comparable EBITDA declined to EUR 2.6 million (3.3)
• Cash flow from operations was EUR 3.3 million (-2.7)
(In this financial report, figures shown in brackets refer to the comparison period last year if not otherwise stated. )
Outlook for 2023
Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2023 will increase from 2022. In 2022, Suominen’s comparable EBITDA was EUR 15.3 million.
Tommi Björnman, President & CEO:
“For Suominen the beginning of 2023 has been challenging. Even though the raw material prices started to decline in the first quarter of 2023, they are still significantly higher than in the comparison period. Our net sales were EUR 116.8 million (110.3) in the first quarter. Sales prices increased and sales volumes were at the same level as in the comparison period despite the strikes in the Finnish ports and at our Mozzate plant in Italy.
Our quarterly EBITDA declined to EUR 2.6 million (3.3). Our raw material costs increased more than the sales prices which react to the cost increases with a lag due to our price mechanism.
In January 2023 we started a consultation procedure regarding a plan to permanently close manufacturing at our Mozzate plant in Italy. The consultation procedure has now been concluded and the production at Mozzate ended in April 2023.
As the frontrunner in sustainable nonwovens Suominen organized a Sustainability & New Fiber Seminar in Nakkila at end of February 2023. The Seminar gathered around fifty participants from across the nonwoven production value chain and received excellent feedback. Our innovation and sustainability work was also recognized as our HYDRASPUN® Circula won EDANA’s INDEX™23 Award at INDEX™23 exhibition showcasing how innovation and sustainability are driving the nonwovens industry forward.
The near future continues to look challenging and the competition is fierce. The market remains unstable, and the same applies to raw material, energy and freight costs. However, we are more optimistic about the second half of the year. The raw material prices declined in Q1/2023 from the previous quarter (Q4/2022) and we are seeing signs that the raw material prices remain close to Q1/2023 level in the foreseeable future. It remains to be seen how the current economic climate impacts the end consumer demand and consumer preferences regarding wipes. Historically, the wipes market has been rather steady despite the general economic situation. All in all, we expect that our comparable EBITDA in 2023 will increase from 2022.
I am happy to join Suominen and work together with the team to repositioning the company toward a profitable growth journey.”
NET SALES
In January–March 2023, Suominen’s net sales increased by 6% from the comparison period to EUR 116.8 million (110.3). Sales volumes were on the same level as in Q1/2022 despite the strikes in the Finnish ports and at our Mozzate plant in Italy. Sales prices increased following the higher raw material prices. Currencies impacted net sales positively by EUR 3.4 million.
Suominen has two business areas, Americas and Europe. Net sales of the Americas business area were EUR 75.0 million (61.7) and net sales of the Europe business area were EUR 41.8 million (48.5).
EBITDA, OPERATING PROFIT AND RESULT
EBITDA (earnings before interest, taxes, depreciation and amortization) declined to EUR 2.6 million (3.3). Our raw material costs increased more than the sales prices which react to the cost increases with a lag due to our price mechanism. The positive impact from currencies on EBITDA was EUR 0.1 million.
Comparable operating profit decreased to EUR -2.0 million (-1.3). Operating profit was EUR -2.1 million (-1.3). Items affecting comparability were EUR -0.1 million, consisting of impairment of assets in Italy related to the planned closure of Mozzate production.
Result before income taxes was EUR -3.6 million (-2.2), and result for the reporting period was EUR -3.9 million (-2.3).
CHANGES IN THE EXECUTIVE TEAM
Suominen announced on March 30, 2023 that Tommi Björnman will start as the President & CEO on April 1, 2023.
Suominen announced on March 6, 2023 that Janne Silonsaari was appointed as the CFO and a member of the Executive Team. He will start latest in June 2023.
OUTLOOK FOR 2023
Suominen expects that its comparable EBITDA (earnings before interest, taxes, depreciation and amortization) in 2023 will increase from 2022. In 2022, Suominen’s comparable EBITDA was EUR 15.3 million.
PROGRESS IN SUSTAINABILITY
We have strong focus on safety and accident prevention, and our long-term target is to have zero lost time accidents. In the first quarter two LTA’s occurred at Suominen sites.
The employee-manager performance and development discussions, conducted in February–March, covered 97% of the white-collar employees. We continue implementing a globally harmonized performance and development process for our blue-collar employees globally.
We are committed to continuously improving our production efficiency and the efficient utilization of natural resources. In the first quarter we continued our active measures towards our targets to reduce energy consumption, greenhouse gas emissions, water consumption and waste to landfill by 20% per ton of product by 2025 compared to the base year of 2019.
We offer a comprehensive portfolio of sustainable nonwovens to our customers and we are continuously developing new and innovative solutions with a reduced environmental impact. Our target is a 50% increase in sales of sustainable nonwovens by 2025 compared to 2019, and to have over 10 sustainable product launches per year.