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Suominen - Another exceptional quarter

Suominen’s Q3 figures continued to defy our expectations as marginal profitability increased further q/q despite being already exceptionally high in Q2.
  • Suominen Q3 revenue amounted to EUR 115.4m (up 12% y/y), compared to our EUR 114.0m expectation.
  • Europe top line was EUR 43.5m while we estimated EUR 41.0m. Americas posted EUR 71.9m, compared to our EUR 73.0m estimate.
  • Gross profit amounted to EUR 19.7m vs our EUR 17.1m estimate. Gross margin was therefore 17.1% vs our 15.0% expectation. In our view the additional improvement in gross margin (which amounted to 16.0% in Q2’20) indicates Suominen was able to defend its nonwovens pricing in a favorable supply-demand environment, despite low raw materials prices. Suominen hinted at such an opportunity during its CMD, and our view proved too conservative in this respect.
  • Suominen Q3 EBIT was EUR 12.9m, compared to our EUR 9.8m estimate. The beat was mostly due to the higher gross margin and resulting gross profit, however Suominen was also somewhat more efficient in terms of SG&A.
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