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Analyytikko
Suominen reports Q4 results on Feb 3. It’s clear Q4 will be a lot better than previous quarters, while FY ’23 profitability continues to improve. Many factors now support margins, but valuation also reflects better performance.
Ahead of the full-year results, we note that the encouraging trends in the US, which we highlighted after the Q3 results, seem to have remained intact.
Suominen has initiated a consultation process to close manufacturing at its Mozzate plant in Italy in Q2 2023, amidst high cost and tough competition in the market for standard nonwovens wipes.
Suominen’s margins remained very low in Q3, but the worst of cost pressures are easing and continued high demand, especially in the US, should begin to drive significant gains.
While Q3 was still burdened by high costs, we note the market environment looks to be starting to improve, with volumes picking up in the US and a more benign cost development.
Suominen’s Q3 profitability improved a bit from the recent lows but remained very modest and below our estimate as energy costs seem to have been a bigger challenge than we expected.
Suominen reported stronger than expected sales growth of 34% y/y and 12% q/q, but EBITDA of EUR 5.1m fell short of consensus (Vara) estimates, and cash flow was strained by a substantial increase in working capital in Q2.
Suominen reports Q3 results on Oct 26. We make only minor estimate revisions ahead of the report as we continue to expect improvement over the coming quarters.
Suominen’s Q2 earnings missed estimates, but valuation isn’t very demanding on moderate estimate levels.
Q2 comparable EBITDA of EUR 1.9m was below expectations but management expects improving H2 volumes. We expect a margin recovery starting from the low level in Q2 – but we cut 2022E EBITDA to EUR 21m. Marketing material commissioned by Suominen Oyj.
