HELSINKI - Nonwovens manufacturer Suominen has slumped to a loss in its fourth quarter, hit by higher raw material and energy costs.
The loss for the period was €8.8 million, down from a profit of €2.5 million in the same period last year. Total sales in the quarter were up 15.1% to €133.1 million.
Announcing the results, Klaus Korhonen, interim President and CEO, said that 2022 had been a difficult year for Suominen. "The unprecedented raw material inflation which impacted us significantly already in 2021 persisted, and additionally also energy costs surged in 2022 after Russia’s unlawful invasion of Ukraine in February," he said, adding that the US business specifically continued to suffer from the high inventory levels in the whole supply chain, where imbalance started to normalize only during the second half of the year.
Net sales for the year reached €493.3 million, up from €443.2 whilst the annual loss for the period was €13.9 million, down from a profit of €20.7 million.
"Our comparable EBITDA decreased clearly from the previous year and was €15.3 million (€47.0)," Korhonen added. "The higher sales prices could not fully compensate for the volume loss and for the higher raw material and energy costs. To improve our profitability, we took several actions during the year such as implementing energy surcharges in Europe in March and September and a general cost surcharge in North America in August as well as widening our product portfolio in the US."
Over the course of the year, Suominen also announced an investment to enhance and upgrade one of its lines in Nakkila, Finland. The investment strengthens its capabilities in sustainable products and is made in line with its strategy and vision to be the frontrunner in sustainable nonwovens. The investment project is proceeding according to plan and is expected to be completed in the second half of 2023.
"We are continuously developing our sustainable product offering and our target is to increase the sales of sustainable products by 50% compared to the base year of 2019 and launch over 10 sustainable products per year," Korhonen said. "In 2022, the sales of sustainable products were 99% higher than in the baseline year 2019 and during the year we launched 12 sustainable products. One example of new products launched in 2022 is our first carbon neutral product Biolace Zero. We also opened our own compostability test center Green Lab in Nakkila, Finland to support our product development."
Tommi Björnman was appointed Suominen’s new President and CEO in November 2022. He currently works as President and CEO of Avgol Nonwovens and will join Suominen in May 2023 at the latest.
In January 2023 the company also started a consultation procedure regarding a plan to permanently close manufacturing at our Mozzate plant in Italy.
Looking at the year ahead Suominen says it sees several market drivers with a positive impact. The raw material cost inflation finally turned in Q4/2022, the energy markets show signs of price decline and in the US market the inventory levels have now receded to their normal levels. However, it remains to be seen how the current high consumer price inflation impacts the end consumer demand of wipes. Usually the wipes market has been rather steady despite the general economic situation.
