Suominen: Sales growth but less profit

Sales growth but less profit

(Source: Suominen)
(Source: Suominen)

2022 was a difficult year for Suominen. The unprecedented raw material inflation which impacted the company significantly already in 2021 persisted, and additionally also energy costs surged in 2022 after the events in Ukraine in February. Suominen’s business in the USA specifically continued to suffer from the high inventory levels in the whole supply chain, where imbalance started to normalize only during the second half (H2) of the year.
Net sales in 2022 increased by 11.3% to €493.3 million. Comparable EBITDA (earnings before interest, taxes, depreciation and amortization) decreased clearly from the previous year and was €15.3 million (2021: €47.0 million). The higher sales prices could not fully compensate for the volume loss and for the higher raw material and energy costs. Items affecting comparability were € -4.8 million, consisting of impairment of assets in Italy related to the planned closure of the Mozzate production plant.
To improve profitability, Suominen Corp., Helsinki/Finland, took several actions during the year such as implementing energy surcharges in Europe in March and September and a general cost surcharge in North America in August as well as widening our product portfolio in the USA.
In 2022, the gross capital expenditure totaled €9.7 million (2021: €17.8 million) and the largest item was related to the growth investment initiatives in Nakkila/Finland.
Suominen announced in June 2022 that it is strengthening its capabilities in sustainable products by enhancing and upgrading one of its production lines in Nakkila. The total value of the investment is approx. €6 million, and the investment project will be completed in H2/2023.
Suominen sold its minority share in Amerplast (Bright Maze Oy) in March 2021. The transaction impacted Suominen’s net financial expenses of the comparison year positively by €3.7 million.
Regarding sustainable products, the target is to increase sales by 50% by 2025 and to have over 10 sustainable product launches per year. In 2022, the company launched 12 sustainable products, and the sales of sustainable product sales has increased by 99% compared to the base year of 2019.
In 2022 Suominen completed the EcoVadis sustainability assessment for the first time and received a silver level rating. This result places them in the top 8% of companies in the manufacture of other textiles industry rated by EcoVadis.
Tommi Björnman was appointed Suominen’s new President and CEO in November 2022. He currently works as President and CEO of Avgol Nonwovens and will join Suominen in May 2023 at the latest.
Looking at the year ahead, several market drivers with a positive impact to Suominen can be seen. The raw material cost inflation finally turned in Q4/2022, the energy markets show signs of price decline and in the US market the inventory levels have now receded to their normal levels. However, it remains to be seen how the current high consumer price inflation impacts the end consumer demand of wipes.

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