Suominen - Q2 results ruined by trade war
Suominen’s Q2 revenue dropped steeply as the tariff situation caused volatility in the US supply chain since customers stocked their inventories with supplies from China. This caused another major profitability headwind and the EUR 3.2m comparable EBITDA fell short of estimates. Suominen retains its guidance as the cost savings program delivers results, in addition to which sales margins were still improving at least in Q2.
- Suominen Q2 revenue decreased by 16% y/y to EUR 99.8m vs the EUR 119.0m/118.3m Evli/consensus estimates. Americas amounted to EUR 59.9m, compared to our EUR 75.0m estimate, whereas EMEA was EUR 40.0m vs our EUR 44.0m estimate. US nonwoven customers stocked their inventories, mainly with supply from China, ahead of the announced tariffs. This built up inventories throughout the supply chain, although a gradual demand recovery happened towards the end of Q2. Currencies had a negative revenue impact of EUR 3.6m.
- Gross profit came in at EUR 7.0m, compared to our EUR 10.1m estimate, meaning gross margin was 7.0% vs our 8.5% estimate. In our view higher sales prices continued to help sales margins while lower sales volumes had a negative impact on gross margin.
- Comparable EBITDA was EUR 3.2m vs the EUR 5.8m/4.8m Evli/consensus estimates, while comparable EBIT landed at EUR -1.0m vs the EUR 1.3m/0.4m Evli/consensus estimates. The Bethune investment ramp-up phase and costs related to the change of CEO also burdened results besides the lower sales volumes. The majority of the cost saving program actions will be implemented by the end of the year.
- Suominen guides its FY’25 comparable EBITDA to increase from the EUR 17.0m comparison figure (unchanged).