Suominen: Higher raw material prices put pressure on margins; slightly credit-negative - Nordea

Suominen claims it was able to resolve the operational issues it faced during Q3, but this was not yet visible on the P&L. During Q4, the company faced increased competition from low-cost countries, mainly in Europe, which had a negative impact on sales volumes. Despite the competitive pressure, Suominen claims it was able to improve selling prices and sales mix. However, this was not enough to offset weaker sales, and, as a result, its comparable EBITDA came down from last year. Cash flow was also weak compared to last year, mainly due to the build-up of inventory. During 2024, Suominen announced two large investments, one in the US (EUR 10m production line upgrade) and another one in Spain (EUR 20m new production line). Both investments are proceeding as planned and are expected be completed on schedule, in H1 2025 and H2 2025 respectively. Going into 2025, management sees the market demand as remaining solid, but highlights the risks of geopolitical tensions, which cause some temporary uncertainty. Overall, we assess Suominen’s Q4 report as slightly credit-negative.

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