Suominen - Improvement pace still quite slow
Suominen’s Q1 earnings gained y/y, however the improvement pace was slower than we estimated as EBITDA did not improve q/q. Gross profit came in EUR 1.5m lower than we estimated while comparable EBITDA fell short by some EUR 2m.
- Suominen Q1 revenue decreased by 3% y/y to EUR 113.6m, compared to the EUR 113.5m/113.3m Evli/consensus estimates. Americas was EUR 70.0m vs our EUR 73.5m estimate, while Europe amounted to EUR 43.5m vs our EUR 40.0m estimate. Sales volumes increased especially in EMEA. Sales margins also improved while sales prices decreased following lower raw materials prices.
- Gross profit was EUR 8.1m vs our EUR 9.6m estimate. Gross margin amounted to 7.2%, compared to our 8.5% estimate. Gradual improvements are expected in production performance and line efficiencies. Suominen also adds to its sustainable products capabilities by enhancing and upgrading one production line in Bethune, SC, which is to cost some EUR 10m and be ready in H1’25.
- Comparable EBITDA landed at EUR 4.5m vs the EUR 6.6m/6.0m Evli/consensus estimates, whereas comparable EBIT was EUR -0.1m vs the EUR 2.1m/1.8m Evli/consensus estimates.
- Suominen guides comparable FY ‘24 EBITDA will increase y/y (EUR 15.8m previous year).