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Suominen: Refinancing comes at a higher price

SUY1VResearch12.10.2026 klo 09.30
Rauli JuvaAnalyst
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Summary

  • Suominen is expected to refinance its 50 MEUR bond maturing in June 2027, with anticipated higher financing costs due to rising interest rates and high net debt/EBITDA levels.
  • The analyst has raised Suominen's financial expense estimates by approximately 2 MEUR annually for 2027–2029, projecting only slightly positive net income by 2028.
  • Despite anticipated earnings improvements from efficiency programs, the analyst doubts Suominen will meet its 10% EBITDA margin target, estimating a 6-7% margin for 2028-29.
  • The analyst maintains a Reduce recommendation and lowers the target price to EUR 0.6, citing high earnings-based valuation and limited competitive advantages affecting long-term returns.

This content is generated by AI. You can give feedback on it in the Inderes forum.

Translation: Original published in Finnish on 10/12/2026 at 7:30 am EEST.

We expect Suominen to renew its bond in the coming months, and we raised our financing cost forecasts for the coming years. The share's earnings-based valuation remains very high, as in our estimates the company's net income turns slightly positive only in 2028. We reiterate our Reduce recommendation and lower our target price to EUR 0.6 (previously EUR 0.63) due to estimate revisions.

Bond refinancing in the near future

Suominen has a 50 MEUR bond maturing in June 2027. The loan carries a very low interest rate of 1.5%, as it was issued in the spring of 2021. We believe the company will seek to secure the refinancing of the loan later this year or, at the latest, immediately after the Q4 report early next year. We estimate that the company's primary goal will be to replace the bond with a new one. However, even after the share issue, the company's net debt/EBITDA is quite high (5x), and we expect it to remain at the 4-5x level for the coming quarters. We consider it possible that the company will arrange the refinancing in some other way as well, e.g., as a combination of a small hybrid loan and bank financing. Regardless of the form of financing, it is clear that the company's financing costs will rise significantly as a result of the refinancing.

We raised our financing cost estimates

We had already factored in the rising interest expenses to some extent in our forecasts from 2027 onwards. Taking into account the company's persistently high debt and rising interest rates, we have raised our financial expense estimates in this report by approximately 2 MEUR per year for 2027–2029. As a result, Suominen's net profit will remain only slightly positive in our estimates for 2028.

Suominen's result suffered to some extent from the increased raw material costs in Q2. We estimate that the company has been able to offset the increase in raw material costs in the spring and summer through price increases. However, the sharp rise in oil prices during September is driving raw material costs up during the remainder of the year, which we forecast to have a negative impact on Q4 earnings. We have therefore slightly lowered our forecasts for this year. We still forecast an adjusted EBITDA of ~15 MEUR for the full year, which, in line with the company's guidance, is an improvement from last year's weak level (12.6 MEUR).

We expect rising earnings in the coming years, but clearly below the company's target

We anticipate that Suominen will achieve a significant improvement in earnings in the coming years, bolstered by the efficiency program, though we doubt it will even come close to its 10% EBITDA margin target. Our adjusted EBITDA margin estimate for 2028-29 is 6-7%. This is because we believe the benefits of efficiency improvements will be passed at least partially on to customer prices, along with normal cost inflation. In the medium and long term, however, we still expect a higher margin level than in the next few years.

Elevated multiples, weak expected return

The share price is so high relative to earnings that it requires several years of strong earnings growth before the valuation is at a justified level (EV/EBIT somewhat neutral at 10x only in the 2030s). On our estimates, the company's EPS will not turn positive until 2028. Due to limited competitive advantages, we do not believe that the company can achieve a return on capital that sustainably exceeds the required return in the long term. This limits the stock's upside, even in a positive scenario. Our DCF model value is roughly in line with the target price. The DCF model assumes a significantly better margin for the company in the long term than the current one.

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Suominen is a manufacturing company. The company manufactures and develops a wide range of wipes, hygiene products and medical applications. The manufacturing is based on non-woven fabrics that can be used for various purposes. Customers are found in several industries, with the largest operations in Europe and North America. The company has its headquarters in Helsinki.

Read more on company page

Key Estimate Figures12.10.

202526e27e
Revenue412.4426.2468.8
growth-%-10.8 %3.3 %10.0 %
EBIT (adj.)-4.1-1.62.0
EBIT-% (adj.)-1.0 %-0.4 %0.4 %
EPS (adj.)-0.18-0.04-0.03
Dividend0.000.000.00
Dividend %
P/E (adj.)neg.neg.neg.
EV/EBITDA15.417.89.6

Forum discussions

Tässä on Raulilta yhtiöraportti Suomisesta Odotamme Suomisen uusivan joukkovelkakirjalainansa lähikuukausina, ja nostimme rahoituskuluennusteitamme...
18 hours ago
by Sijoittaja-alokas
1
Rauli has published an equity research report on Suominen following their Q2 results Suominen’s Q2 result was better than we expected and better...
8/10/2026, 7:24 AM
by Sijoittaja-alokas
0
Suominen’s CEO Charles Héaulmé was interviewed by Rauli regarding the Q2 results Topics: 00:00 Introduction 00:12 Key highlights of Q2 02:16...
8/7/2026, 11:47 AM
by Sijoittaja-alokas
0
Boom! Suominen beat forecasts for the first time in about five years. The level is admittedly still weak, but at least the adj. operating profit...
8/7/2026, 6:28 AM
by Rauli_Juva
4
Thanks for asking. After a quick look into the industry and its companies, it feels like there are quite a lot of challenges in general, and...
8/5/2026, 10:13 AM
by Sijoittaja-alokas
0
CEO Charles will be interviewed again on Friday following the Q2 results. If you have any questions that have come to mind, please send them...
8/5/2026, 9:53 AM
by Rauli_Juva
1
Here are Rauli’s preview comments ahead of Suominen’s Q2 report release on Friday, August 7th. We expect revenue to have turned to clear growth...
8/5/2026, 7:26 AM
by Sijoittaja-alokas
0