#Nonwovens / Technical Textiles
Suominen with slightly improved EBITDA and unchanged outlook
July–September 2023 in brief:
(In this interim report, figures shown in brackets refer to the comparison period of the previous year if not otherwise stated)
- Net sales decreased by 19% from the corresponding period of 2022 and were EUR 106.4 million (131.9)
- Comparable EBITDA improved slightly to EUR 5.2 million (5.1)
- Cash flow from operations improved to EUR 8.0 million (-10,8)
January–September 2023 in brief:
- Net sales decreased by 7% and were EUR 335.9 million (360.2)
- Comparable EBITDA increased slightly to EUR 10.5 million (10.3)
- Cash flow from operations improved and was EUR 17.6 million (-1.6)
Outlook for 2023 unchanged
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:
“The third quarter showed signs of improved profitability. Our quarterly comparable EBITDA improved slightly to EUR 5.2 million (5.1) being at the highest level since the fourth quarter of 2021. EBITDA improvement is mainly due to the increased sales margins.
Our net sales were EUR 106.4 million (131.9) in the third quarter. Sales prices decreased following the decline in raw material prices. Sales volumes decreased following the closure of the Mozzate plant in Italy in the second quarter. Currencies impacted the net sales negatively by EUR 5.2 million.
Our commercial and operational excellence improvements are proceeding according to plan and have gradually started to contribute to the result. Going forward, we will continue to systematically execute our improvement action plan.
In the third quarter we were awarded a silver level rating from the EcoVadis sustainability assessment for the second time. We improved our rating by five points and this result places us in the top 5% of companies in the manufacture of other textiles industry rated by EcoVadis.
Our strong ability to innovate and meet market needs is reflected in the share of new products of our net sales, which continued on a good level and exceeded 35% in the third quarter.
Looking ahead, in addition to our internal efficiency measures we will continue leveraging our innovative portfolio to serve our customers and extract the value to improve our profitability. Despite the challenging global economy, we see at the moment positive signs in our business environment in 2024.”
NET SALES
July–September 2023
In July–September 2023, Suominen’s net sales decreased from the comparison period by 19% to EUR 106.4 million (131.9). Sales prices decreased following the decline in raw material prices. Sales volumes decreased following the closure of the Mozzate plant in Italy in the second quarter. Currencies impacted the net sales negatively by EUR 5.2 million.
Suominen has two business areas, Americas and Europe. Net sales of the Americas business area amounted to EUR 70.9 million (80.3) and net sales of the Europe business area to EUR 35.6 million (51.7).
January–September 2023
In January–September 2023, Suominen’s net sales declined from the comparison period by 7% and amounted to EUR 335.9 million (360.2). Sales prices decreased following the decline in raw material prices. Sales volumes decreased following the closure of the Mozzate plant in Italy in the second quarter. Currencies impacted the net sales negatively by EUR 3.3 million.
Net sales of the Americas business area amounted to EUR 215.7 million (206.3) and net sales of the Europe business area to EUR 120.2 million (154.1).
EBITDA, OPERATING PROFIT AND RESULT
July–September 2023
Comparable EBITDA (earnings before interest, taxes, depreciation and amortization) was EUR 5.2 million (5.1). EBITDA was EUR 5.2 million (5.1). The items affecting comparability of EBITDA during Q3 totaled EUR -0.0 million.
Comparable operating profit increased from the comparison period and amounted to EUR 0.7 million (0.2). Operating profit increased from the comparison period and amounted to EUR 0.6 million (0.2). The items affecting comparability of operating profit totaled EUR -0.0 million.
Profit before income taxes was EUR -0.5 million (0.1), and profit for the reporting period was EUR 0.8 million (-0.4). Income taxes for the period were EUR +1.3 million (-0.5).
January–September 2023
Comparable EBITDA (earnings before interest, taxes, depreciation and amortization) was EUR 10.5 million (10.3). Lower sales volumes were offset by higher sales margins. Currency impact on EBITDA was EUR +0.7 million.
EBITDA declined to EUR 5.9 million (10.3) due to non-recurring items arising from the closure of production at the Mozzate plant in Italy. The items affecting comparability of EBITDA totaled EUR -4.6 million and consisted mainly of dismissal and restoration expenses.
Comparable operating profit improved and was EUR -3.4 million (-4.0). Operating profit decreased and was EUR -8.2 million (-4.0). The items affecting comparability of operating profit totaled EUR -4.8 million.
Profit before income taxes was EUR -12.2 million (-4.3), and profit for the reporting period was ?EUR -11.4 million (-5.1).
Income taxes for the period were EUR +0.8 million (-0.8).
FINANCING
The Group’s net interest-bearing liabilities at nominal value amounted to EUR 52.2 million (65.8) at the end of the review period. The gearing ratio was 40.1% (39.9%) and the equity ratio 40.9% (39.8%).
In January–September, net financial expenses were EUR -4.0 million (-0.3), or -1.2% (-0.1%) of net sales. Fluctuations in exchange rates decreased the net financial expenses by EUR 0.0 million (in 2022, decreased by EUR 4.4 million).
Cash flow from operations in July–September was EUR 8.0 million (-10.8) and in January–September EUR 17.6 million (-1.6), representing a cash flow per share of EUR 0.31 (-0.03). The improvement in the cash flow from operations for January–September was driven by improvement in net working capital, especially by the decrease of working capital tied to the inventory.
In the third quarter the change in net working capital was EUR +4.5 million (-13.9). The change in net working capital in January–September was EUR +16.6 million (-7.3).
CAPITAL EXPENDITURE
In January–September, the gross capital expenditure totaled EUR 8.9 million (7.4) and the largest item was related to the growth investment initiative at the Nakkila plant in Finland. Other investments were mainly for maintenance.
Depreciation, amortization and impairment losses for the review period amounted to EUR 14.1 million (14.3).
PROGRESS IN SUSTAINABILITY
During the third quarter of 2023, Suominen was awarded a silver level rating from the EcoVadis sustainability assessment. This was the second time that they completed the EcoVadis assessment, and they improved their rating by five points. This result places them in the top 5% of companies in the manufacture of other textiles industry rated by EcoVadis.
By the end of September there have been 5 LTAs at Suominen sites. Suominen will continue the systematic safety work and preventive actions. They will also initiate a special safety awareness campaign to remind the importance of attitude, behavior and operating model in everyday safety. The campaign is set to start in Q4.
Suominen systematically measures the employee engagement and collect feedback by conducting an engagement survey, Suominen Vibe, annually. This year's Suominen Vibe survey started in October.
Suominen is constantly improving our production efficiency and the efficient utilization of natural resources. In the third quarter they continued their actions towards their 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.
Sustainability is at the core of Suominen's R&D and they are continuously developing new innovative solutions into the already comprehensive portfolio of sustainable nonwovens. The target is to increase the sales of sustainable products by 50% by 2025 compared to 2019, and to have at least 10 sustainable product launches per year.
Suominen reports progress in its sustainability KPIs annually.
As part of our Annual Report 2022 published in March 2023, we reported on the progress of our sustainability performance. Our sustainability reporting in 2022 was done in accordance with the GRI Standards of the Global Reporting Initiative and it was assured by an external partner.
https://www.suominen.fi/newsroom/2023/suominen-corporations-interim-report-for-january-1--september-30-2023-ebitda-improved-from-q22023-outlook-unchanged/
