Suominen: Slightly below consensus for Q2E – cost pressure might ease going into 2025 - Nordea

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.

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