Suominen Oyj

Country:
Sector:
Market cap (m):
Finland
Consumer Goods
EUR 132.83
Bloomberg:
Reuters:
Website:
SUY1V FH
SUY1V.HE
Share price (close):
EUR 2.28

Latest Reports

7 NOV 2024
Commissioned Research: A blip in the improving trend
Suominen's Q3 earnings fell significantly short of Vara Research consensus, mainly due to a EUR ~3m negative impact from operational issues during the quarter. The operational issues should not have a major impact on Q4 figures, as we understand it. The top line grew 5% y/y and was supported by improved volumes and sales prices. The market outlook remains stable and we expect a gradual volume recovery going forward, with self-help measures and new investments in Alicante and Bethune offering support for the bottom line in the latter part of 2025 and beyond. We expect falling pulp prices to support earnings, as sales prices tend to follow with a lag. Our DCF- and multiples-based fair value range is EUR 1.7-2.4 (1.8-2.5). Marketing material commissioned by Suominen Oyj.

6 NOV 2024
Commissioned Research: Soft Q3 partly explained by operational issues – guidance requires resolving of operational issues
Suominen’s results turned into sequential decline in Q3 due to operational issues and fell short of Vara Research consensus expectations. The company expects its target market to remain stable in the short term although some uncertainties related to global economic sentiment remain. Sales volumes, prices and margins increased y/y in Q3, while FX had a negative impact. Americas sales were weaker than we had anticipated while EMEA came above our expectations. Guidance of improving comparable EBITDA was maintained intact, while consensus has modelled EUR 24.4m in 2024E after EUR 15.8m in 2023. We note operational issues in Q3 while we do not know if the company has been able to resolve these during the quarter. Initially, we anticipate consensus to take down 2024 estimates more than 10% with more muted revisions for 2025E. In order to reach its guidance, Suominen has to deliver above EUR 3m comparable EBITDA in Q4, while we have anticipated EUR 6.6m.

1 NOV 2024
Commissioned Research: Gradual profitability improvement to continue
We expect Suominen to deliver another quarter of improving profitability, driven by increased volumes and sales prices y/y. Declining raw material prices will likely alleviate some margin pressure going forward, as we expect sales prices to lag pulp prices. Overcapacity, especially in the European market, could partly counteract the otherwise improving operating environment. We trim 2024E-26E sales by 1% and cut 2024E adjusted EBITDA by 6%. We raise 2025E-26E EBITDA by 3-4%. Our fair value range increases slightly to EUR 1.8-2.5 (1.7-2.4), based on a combination of DCF- and multiples-based valuation approaches. - Marketing material commissioned by Suominen Oyj.

12 AUG 2024
Commissioned Research: Gradual improvement continued in Q2
Suominen's Q2 earnings fell slightly short of Vara consensus expectations, which leaves some uncertainty over the recovery pace heading into important H2. Volume development was positive, with an improving sale mix, but sales prices declined. New products continue to support the mix, and the company announced a EUR 20m investment into a new production line at the Alicante site. The company expected a stable market development, while lower pulp prices could support earnings going into 2025, we believe. Our DCF- and multiples-based fair value range is EUR 1.7-2.4 (1.8-2.5). Marketing material commissioned by Suominen Oyj.

9 AUG 2024
Commissioned Research: Flash Comment: 14% miss on adjusted EBITDA – target market expected to remain stable
Suominen’s results continued gradual improvement from Q1, while fell short of Vara Research consensus expectations. The company expects its target market to remains stable in the short term although some uncertainties related to global economic sentiment remain. Sales volumes increased y/y in Q2, while sale prices were down due to lower raw material prices. Americas sales were stronger than we had anticipated while EMEA fell short of our expectations. Guidance of improving comparable EBITDA was maintained intact, while consensus has modelled EUR 26.3m in 2024E after EUR 15.8m in 2023. Initially, we anticipate consensus to take down 2024 estimates to the tune of mid- to high-single digits.

Analysts: Joni Sandvall
2 AUG 2024
Commissioned Research: Flash Comment: Slightly below consensus for Q2E – cost pressure might ease going into 2025
We maintain our estimates intact ahead of Suominen’s Q2 report, due on 9 August. We expect sales to turn on a growth mode in Q2, supported by improving volumes and prices. High pulp prices have persisted during Q2, while we note recent market implications for lower prices. However, owing to lag effect, we believe lower variable costs to become visible only in Q4 and in 2025. Top line development is likely to be supported in H2 by high input costs. In May, Suominen announced restructuring programme that is expected to generate EUR 1.5m annual costs savings from September 2024 onwards. Suominen expects EUR 2m one-off costs related to restructuring. We believe the company is taking right steps with its new operating model, while high pulp costs are likely to overshadow improvement in short-term. Our DCF- and multiples-based fair value range for Suominen is EUR 1.8-2.5.

31 MAY 2024
Commissioned Research: Flash Comment: Initiates restructuring programme with EUR 1.5m annual cost savings target
Suominen has today announced a restructuring programme that is expected to generate EUR 1.5m annual costs savings from September 2024 onwards. Suominen expects EUR 2m one-off costs related to restructuring. Restructuring is expected to result in a termination of up to 10 positions in the headquarters and global support functions. Suominen announced new operating model end of last year and we view restructuring as a logical next step to align the structure of the company accordingly. Vara Research consensus is modelling EUR 36.7m adjusted EBITDA in 2025E, after EUR 26.5m in 2024E. Hence, mathematically, restructuring could give some low-single digit to consensus estimates. However, we note continued increase in pulp prices, which could mitigate the impact of the restructuring programme, at least in short-term. For Q2E, we are 2% ahead of consensus on top-line and 11% (EUR 0.7m) below on adjusted EBITDA.

8 MAY 2024
Commissioned Research: Slow profit improvement pace continued in Q1
Suominen's Q1 2024 adjusted EBITDA fell short of Vara Research consensus. The company has seen improving volumes and noted positive signs of demand in the market. We expect a gradual margin recovery, while high pulp prices create uncertainty. We trim our estimates due to expected higher raw material costs and derive a slightly lower DCF- and multiples-based fair value range of EUR 1.8-2.5 (2.0-2.7). Marketing material commissioned by Suominen Oyj.

7 MAY 2024
Commissioned Research: Flash Comment: Comparable EBITDA below consensus expectations in Q1 – positive signs of demand recovery
Suominen’s result were down slightly from Q4 and fell short of Vara Research consensus expectations. Despite challenging business environment, the management notes positive signals of demand recovery in the market. Sales volumes increased y/y in Q1 (especially in EMEA), while sale prices were down. Guidance of improving comparable EBITDA was maintained intact, while consensus has modelled EUR 30.3m in 2024E after EUR 15.8m in 2023. Initially, we anticipate consensus to revise down 2024 estimates to the tune of mid- to high-single digits.

Analysts: Joni Sandvall
2 MAY 2024
Commissioned Research: EUR 10m investment into Bethune – we are slightly below consensus on adjusted EBITDA for Q1E
Ahead of Suominen’s Q1 report, due on 7 May, we maintain our estimates intact. The company announced on 2 May that it will make EUR 10m investment in strengthening its capabilities in sustainable products in Bethune, USA. Investment will be completed in H1 2025. We have modelled EUR 10-11m annual capex for 2024E-25E. Initially, we see some upside to our capex estimates for 2024E-25E. For Q1E, we are 6% ahead of Vara consensus on sales and 7% below on adjusted EBITDA. We model Americas sales up 1% y/y while we expect Europe sales to be up 4% y/y. The focus in the report will be on management comments on market recovery and price levels going forward. Pulp prices have continued to increase which could put some margin pressure on Suominen, we believe. Suominen guides for improving comparable EBITDA in 2024 (from EUR 15.8m in 2023), which we view somewhat cautious given the low starting point. We model EUR 26m adjusted EBITDA in 2024E, a 66% increase y/y, leaving us 15% below consensus at EUR 31m. Depending of progress of self-help measures, there is possibility that the company could give additional color on its guidance in conjunction with its Q1 report.

Equity analysts

Key persons

CEO: Tommi Björnman

CFO: Janne Silonsaari

Chairman: Jaakko Eskola

Numbers
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Nordea
EURm
2020
2021
2022
2023
2024E
2025E
2026E
Total revenues
458.9
443.2
493.3
450.9
459.8
489.6
506.1
Ebitda (adj.)
60.92
47.00
15.34
15.81
18.89
31.55
36.26
Ebitda - margin
13.3%
10.6%
3.1%
3.5%
4.1%
6.4%
7.2%
EBIT (adj.)
39.5
26.9
-4.2
-2.8
0.2
11.8
15.5
EBIT (adj.) margin
8.6%
6.1%
-0.8%
-0.6%
0.0%
2.4%
3.1%
PTP (adj.)
33.9
26.6
-7.1
-8.7
-4.7
8.2
12.4
Net profit from cont oper (adj)
30.11
20.74
-9.07
-8.02
-4.87
6.40
9.69
Shareholders´ Equity
145.9
163.2
145.9
124.9
113.0
119.4
123.3
Net interest bearing debt
37.1
49.6
54.6
43.5
59.7
67.6
64.1
Net gearing
25.4%
30.4%
37.4%
34.8%
52.8%
56.6%
52.0%
Net debt/EBITDA
0.6
1.1
3.8
3.9
3.4
2.1
1.8
Free cash flow to equity
46.1
-4.4
4.3
19.7
-7.4
-4.9
12.2
Diluted number of shares in issue, year-end (m)
58.3
58.3
58.3
58.3
58.3
58.3
58.3
Nordea Markets estimates published on Nov 7, 2024
Source: Company data, Nordea estimates
Per share data and multiples
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Nordea
EUR and %
2020
2021
2022
2023
2024E
2025E
2026E
EPS (adj.)
0.52
0.36
-0.16
-0.14
-0.08
0.11
0.17
EPS (adj.) growth
13,268.1%
-31.6%
-143.7%
11.5%
39.3%
231.5%
51.3%
DPS
0.20
0.20
0.10
0.10
0.00
0.10
0.11
BVPS
2.5
2.8
2.5
2.1
1.9
2.0
2.1
P/E (adj.)
9.8
14.6
n.a.
n.a.
n.a.
20.7
13.7
EV/Sales
0.73
0.79
0.46
0.46
0.42
0.41
0.39
EV/EBITDA (adj.)
5.47
7.48
14.93
13.14
10.19
6.35
5.43
EV/EBIT (adj.)
8.43
13.04
n.a.
n.a.
1,271.13
16.97
12.69
P/BV
2.03
1.85
1.20
1.32
1.18
1.11
1.08
Dividend yield
3.9%
3.9%
3.3%
3.5%
0.0%
4.4%
4.8%
FCF Yield bef A&D, lease adj
15.6%
-2.2%
2.4%
9.9%
-7.8%
-5.9%
7.0%
RoE
21.6%
13.4%
-9.0%
-9.4%
-5.1%
5.5%
8.0%
ROIC
14.5%
9.7%
-1.5%
-1.1%
0.1%
4.9%
6.2%
Nordea Markets estimates published on Nov 7, 2024
Source: Company data, Nordea estimates

Source: LSEG Data & Analytics