Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Suominen Oyj (FRA:1S0, Financial) reported a 5% increase in net sales for Q2 2024, reaching EUR 118.7 million, driven by increased volumes, particularly in the United States.
- The company's comparable EBITDA improved to EUR 5 million in Q2 2024, up from EUR 2.7 million in the previous year, due to higher sales volumes and an improved sales mix.
- New product sales, which have been commercialized in the past three years, accounted for 37% of net sales, indicating successful portfolio reshaping towards more sustainable products.
- The company announced a new investment in Alicante to increase capacity for sustainable products, with an expected completion in the second half of 2025, reinforcing its strategic focus on sustainability.
- Suominen Oyj (FRA:1S0) maintains a positive outlook for 2024, expecting profitability (EBITDA) to increase from EUR 15.8 million in 2023, despite market uncertainties.
Negative Points
- Cash flow from operations was EUR 2.1 million in Q2 2024, significantly lower than the EUR 6.4 million reported in the previous year, mainly due to negative changes in net working capital.
- The company faced challenges in internal efficiency actions, which impacted the overall improvement in EBITDA.
- Sales prices were lower due to decreased raw material prices, which affected overall revenue growth despite increased sales volumes.
- The Mozzate plant closure and restructuring program incurred EUR 1.2 million in severance costs during Q2 2024.
- The EMEA region experienced flat sales development in Q2 2024, with fierce competition and a stable but tough market environment.
Q & A Highlights
Q: Can you elaborate on the volume development in the Americas and EMEA regions?
A: We saw positive development in both regions, with the main driver for volume growth coming from the United States. Roughly two-thirds of the growth was from the U.S. and one-third from Europe. - Tommi Björnman, President & CEO
Q: How is the current market visibility compared to Q1?
A: The market visibility has remained roughly the same. Europe is stable but competitive, while the U.S. market is somewhat better due to less competition. Latin America was softer in the first half but is expected to strengthen in the second half. - Tommi Björnman, President & CEO
Q: Were there any one-off costs in the increased sales and marketing expenses?
A: There were no specific one-off costs, but we had project-type costs posted as OpEx. We've also been investing in R&D to develop new products and shape our portfolio towards more sustainable and profitable directions. - Janne Silonsaari, CFO
Q: How should we expect working capital changes during the second half of the year?
A: We aim to improve working capital, particularly inventory levels, by Q4. We've maintained net working capital at a competitive level as a percentage of net sales. - Tommi Björnman, President & CEO and Janne Silonsaari, CFO
Q: With the investment in Alicante, will CapEx be above depreciation in 2024 and 2025?
A: Yes, our CapEx will likely be higher than depreciation in both 2024 and 2025 due to the Alicante investment and a smaller investment announced earlier. - Janne Silonsaari, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
