Suominen - Still very challenging
Suominen’s Q4 results were lower than estimated as excess nonwovens capacity still hurt volumes, leading comparable EBITDA some EUR 2m below estimates. FY’26 will be another year with low comparison figures, so improving by at least some amount should not be too hard, but Suominen also introduces a new program to target 10% EBITDA margin by 2028.
- Suominen Q4 revenue decreased by 19.6% y/y to EUR 95.3m, compared to the EUR 108.0m/108.3m Evli/consensus estimates. Americas was EUR 58.8m vs our EUR 65.0m estimate while EMEA amounted to EUR 36.5m, compared to our EUR 43.0m estimate. Sales volumes decreased y/y, and sales prices also followed raw material prices down. Currencies had a negative impact of EUR 4.8m.
- Gross profit came in at EUR 4.9m vs our EUR 8.1m estimate, meaning gross margin was 5.1% vs our 7.5% estimate.
- Comparable EBITDA was EUR 1.9m, compared to the EUR 4.6m/3.9m Evli/consensus estimates, while comparable EBIT landed at EUR -2.2m vs the EUR 0.1m/-0.5m Evli/consensus estimates. Profitability was negatively impacted by lower sales volumes and prices, although lower raw materials prices compensated to some extent.
- Suominen launches a three-year program to target 10% EBITDA margin and a 2-3x leverage ratio by 2028. The program involves an estimated investment of some EUR 30m over the three years, of which transformation costs are estimated at EUR 10m and capital expenditures around EUR 20m to upgrade manufacturing capabilities. No capacity expansion is planned.
- The BoD proposes no dividend to be distributed for FY’25, as expected.
- Suominen guides FY’26 comparable EBITDA to improve relative to the EUR 12.6m comparison figure.