Hello and good morning from Espoo, and welcome to the Suominen Q3 results presentation. My name is Anu Ilvonen, and I am the Head of Communications and Marketing here at Suominen. Joining me today are our President and CEO, Charles Héaulmé, and CFO, Janne Silonsaari, who will present our results. Afterwards, as usual, there will be time for questions and answers. First, I would like to hand over to Charles.
Thank you, Anu. Good morning to all of you, and thank you for joining our call regarding our Q3 results of Suominen. My name is Charles Héaulmé. I'm the CEO of Suominen since the 11th of August 2025, so almost three months ago. I'd like to give a few words about my background without taking too much time. I was previously the CEO of Huhtamaki, the packaging global company based in Finland. I was the CEO of Huhtamaki from 2019 to 2025. Prior to that, I was working in many different leadership positions at Tetra Pak for 20 years, the Swedish global packaging company across many different geographies in the world, including Europe, America, and Latin America also. Very happy to join Suominen and to be today addressing you with our Q3 results together with Janne, our CFO.
Going straight into our results summary for the third quarter under the headline that our profitability was affected by exceptional events, which drove us to, on October 15, decide, based on the forecast we were seeing for the full year, to reduce our outlook. I'd like to now give a few words on the results of the third quarter specifically. Our net sales of close to EUR 100 million decreased by 11% in the quarter compared to EUR 111.6 million last year, comparable period of last year. Janne will give us much more granularity on the variations and the reasons for this decline. The comparable EBITDA increased slightly from EUR 3.3 million-EUR 3.4 million, and the cash flow from the operations was EUR 15.7 million during the quarter three. As I said, the performance in Q3 was significantly affected by exceptional events at two of our U.S. factories.
I'd like to give also a few words of context for those results of Q3. Number one, regarding the market, I'd like to mention that the market in Europe was relatively flat in terms of demand, while the market in the U.S., which is another, of course, very relevant geography for us, the market was growing, particularly in the category so-called MTT, which is the moist toilet tissue. Second point, we have had a solid performance across Europe, but as mentioned, our volume in the U.S. was suffering two major incidents during the third quarter, which are exceptional in their nature. One is a significant mechanical failure in one of our production lines in the U.S. on the structural part of the production line, which has meant that that production line was out of production for two full months.
It includes also, of course, now the ramping up in terms of requalification of the line into the commercial production, and that ramp-up has happened during the month of October. The second one, the second exceptional event, is a flooding in another of our U.S. factories, which has meant two things: an interruption of a couple of days in the production, but also the disposal and write-down of a significant amount of our local inventory, which was on the shop floor. Those two exceptional events had an impact of EUR 2.8 million on the results of the quarter three. That means that if you exclude these two impacts, then we could say that the EBITDA of the quarter three would have been relatively solid, you know, above EUR 6 million. Also, I would like to mention that our cost-saving program has gained traction.
This cost-saving program that was announced in the end of the quarter two, it has gained traction, and we will have implemented the majority of the actions by the end of the year. The second thing I would like to mention is the announcement that came out this morning that you probably have already seen, that we are welcoming François Guetta as our new Chief Operating Officer, and he will be joining and starting in the role on next Monday, November 3. François will be based in Espoo, in Finland, and he comes with a very strong international experience in manufacturing and supply chain leadership. For instance, with more than 20 years at Volvo in different geographies, and then more recently, he was leading the operational transformation of the company Kalmar for about three years. He has worked, as I said, he brings international experience.
He has worked in France, in Poland, in the U.S., and in Sweden. What he brings really to Suominen is very strong aspects. I would summarize in three points. Number one, transformational leadership. Number two, a very systematic approach to continuous improvement methodologies. Number three, great people skills and leadership. We are very pleased to let you know that he has accepted to join us and starting immediately. Therefore, comes at a very good point in time as we want to transform our profitability in the company going forward. With this, I will hand over now to Janne, who will take us through more details on the financial report.
All right. Thanks, Charles, and good morning on my behalf as well. For the net sales, as it says, the sales decreased 11% during Q3 from the comparison period and amounted to EUR 99.8 million. Sales volume decreased, naturally driven by the incidents we faced. That's also opened up. On the positive side, our sales margins increased. Currency impact coming basically from the USD euro conversion was EUR -3.7 million on the top line. Share of the new products continued on a rather stable level at 30% of the net sales. At the year-to-date level, of course, you will see that after three quarters, our net sales have amounted at EUR 317 million. Here we have net sales spreads on both third quarter and year-to-date level.
We have opened the top line impact between organic, exceptional events, preferring for the incident we faced during the quarter, and then the currency, and similarly on the year-to-date level. Organic impact basically includes volume, price, and mixed impact, excluding the currency impact. The exceptional items have been then separated on the analysis. We went from where the comparison period quarter or year-to-date level and items impacting and leading to the actuals 2025. On the comparable EBITDA, and as Charles said, it increased to EUR 3.4 million from the comparison period, EUR 3.3 million, but was negatively impacted by the incidents at U.S. plants by EUR 2.8 million. On top of that, the currencies had EUR 0.3 million positive impact for the quarter.
We could say that we have continued rather stable, but as Charles stated, without the incidents, the impact or EBITDA would have been on, let's say, solid level comparing the trend we have seen in the past quarters. Regarding the consolidated statement of profit or loss, what to bring up here are the main items affecting comparability, and those are arising from the cost-saving program we initiated in May and related position reductions at the end of the quarter too. Nothing major items, so roughly EUR 0.8 million from the IACs. Cash flow from operations amounted to EUR 15.7 million in Q3, and turning year-to-date on positive by EUR 5.2 million. Main driver was improved networking capital. Naturally, lower sales are visible at parts, but we have been focusing on improving our efficiency on each working capital item, and this is visible especially now on Q3.
In this area, naturally, a positive development, which I'm pleased to report. The status update on the cost-saving program update. As all know, in May, we announced a cost-saving program with the targeted savings of EUR 10 million at the annual level. In June, we further announced that the program led to a decrease of approximately 60 positions globally. Saving action implementation has proceeded well during Q3, and we are on track to implement the majority of the actions by the end of the year. This is generally a, let's say, positive side on our actions to support further improvement on the profitability. Unfortunately, as Charles stated earlier, the incidents and the lower profit we have faced through that, we had to revise our outlook on October 15th.
Basically, the statement as reading here is that the company now expects that its comparable EBITDA in 2025 will be lower compared to 2024. In 2024, Suominen's comparable EBITDA was EUR 17 million. Now handing back for the studio. For any questions, then please go ahead.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Joni Sandvall from Nordea. Please go ahead.
Hi, it's Joni from Nordea, and congrats, Charles, for the new position. Maybe first question related to your guidance. It seems that you are assuming, let's say, flat to declining EBITDA on underlying basis for Q4, looking now from Q3. Are you still expecting to incur some costs from these incidents that happened in Q3?
Yes. Good morning, Joni. The events are now, the two events are now completely resolved. Okay. Obviously, once particularly the mechanical failure that interrupted one line for two months was mechanically completely repaired. By the way, I would like to say we took the opportunity of these two months of interruption to refurbish entirely the line, to make it better than it was before the incident, which is a positive outcome moving forward. Once we've done that, we have to ramp up the commercial production, which in obviously any industry where quality is paramount means qualification with customers and so on. Therefore, that takes time. A ramp-up in the production will have a slight impact on October, but not beyond. That is also a reason why we considered being prudent on our Q3, Q4, sorry, perspective, but the main impacts are behind us.
Okay. That's clear. The question on accelerated cost-saving measures: can you give any indication of what is the delta going into 2026 from 2025 if we are thinking now that if you are implementing the majority of the actions now before year-end?
Yeah. Thanks a lot. Good question. It's Janne here. I can confirm that we had roughly EUR 2 million positive impact now during the Q3 if we compare to the previous year, to third quarter. By that, calculating the run rate is at, let's say, our targeted level. Naturally, there are cost items impacting on both ways, as we know. As stated, we are on track with our plan comparing the announced target for the company.
If I may complement to make it specific to your question, because your question was about 2026, I think we take no risk by saying if you consider half of the impact on the P&L 2025 and half the other half is the carryover that we will have in 2026 from the committed EUR 10 million, more or less. Okay?
Okay. That's clear. Maybe a question on the competitive landscape. We know that there is overcapacity in the market. Have you seen any changes in the market environment from the competitive landscape? How competitive are you currently if you consider also the imports to the markets?
Two aspects here. First of all, what we as a company, as a leader in this industry, have to do and then what the market is showing or trending. Yes, there is competition in the market. Yes, at this point in time, in Europe, the market is oversupplied. However, we have good reasons to believe that many different categories are growing, even though the growth in Europe is slower than in the U.S. In the U.S., I would not say that the market is oversupplied. There is demand, particularly in the category of MTT that I was mentioning in the introduction. We should be concerned about the oversupply in the market and about some competitive supply from markets which are low-cost, let's put it like this, from a production point of view. This is particularly in the commoditized categories. What can we do about it? Two main things.
Number one is secure that we are particularly working on the non-commoditized categories. This is what at Suominen we are pushing to do with our innovations for sustainable solutions. Second, reason for our cost reduction program becoming more competitive because competitiveness is one of our key structural problems because we have been having, if you take a long-term perspective from the past 5- 10 years, basically, volume has been flat, roughly, versus structural costs have been increasing. That's on a long-term period of the last 10 years. Therefore, we need to reset our competitiveness.
Okay. Thanks. The last question from my side. Now, you have started as the CEO of the company. What are the key focus areas that you are focusing going into towards the year-end and the beginning of next year?
Yeah. My first focus for the first couple of weeks and months has been to observe, learn, and understand, go around everywhere, and make sure that we understand the situation well before taking actions. Now, we are two and a half months after. Things start to clarify, but we are still now in a period of what I would call an intense or intensive assessment phase where the very important thing is to uncover all the stones, assess everything, acknowledge the reality of the situation, and identify all opportunities for improvement and growth, and we have many, and all the improvements in terms of, for instance, what you were mentioning, competitiveness, but also operational output. This is the focus right now and for the next couple of weeks still on a very deep assessment of the situation. Why is this so important?
If we want to change the course of things, and the course of things, particularly on the profitability, we need to have a very clear understanding and then move to action planning and be comprehensive in this action planning. This is exactly what's going to happen now. The consequence of doing this thorough assessment will be a first phase that will, in terms of execution, take most likely 18 months, maybe 24 months, which I would call a phase of resetting our profitability. I can't give you the granularity of the plan of action, but as soon as we are ready with it, we will certainly want to communicate to the analysts and investors in a transparent way about what we're going to do and how much can be expected. The second phase will be also to plan for the long-term strategy because it's not only about resetting the profitability.
It will be about also mid to long term, how do we scale the company to a different level in terms of growth. We should not scale the company before we have reset the profitability. We are planning this 2030 strategic planning for the first semester 2026. Likely, we will come back with a thorough and comprehensive communication about it within Q2, most likely towards the end of Q2 2026. In the meantime, as I said, once we are ready with the first phase action plan about resetting the profitability, we will invite you for some relevant communication.
Okay, thanks a lot. That's all from me.
Thank you.
The next question comes from Joonas Ilvonen from Evli. Please go ahead.
Hi. It's Joonas from Evli. Your sales margins continue to increase year on year, but how were they quarter on quarter in Q2? Did they still increase compared to Q2?
The sales margin on Q3 versus Q2 is a little bit on the regional level and how the sales mix is basically establishing. On our efficiency improvements, not just on the fixed and structural cost point of view, but also on the variable cost, meaning the raw materials and the general production efficiency and utilization area, have been paying off in that sense that, yes, we have been seeing the steady, slow improvement on the sales margins. As said, naturally, the market environment is very tough when it comes to the pricing. It is, I would say, limited on that area unless we are able to move stronger on that portfolio part where our competitiveness is better. Other than that, we need to naturally improve our cost competitiveness, as Charles was stating. That is a key currently also at the group level.
Yeah. In the short term, you don't really see that much pricing upside or even maybe not that much further volume recovery, just operational efficiency that supports your margins going forward.
I would say that naturally, we are looking for the volume recovery for the company. In the short term, of course, as Charles said, yes, we need to ramp up the commercial production from the incidents, etc. That is one key lever. We are talking about the industry where the margins are relatively low. Your volume is, of course, the biggest lever on going up or downside when it comes to the profitability. That is definitely one focus area, the internal efficiency. It has been and continues to be. Therefore, there was an announcement of the new CEO.
CEO. Thank you.
Excuse me, CEO. Naturally, that is one of the focus areas to have the volume and efficiency on the volume output and efficiency on our production sites up.
I would absolutely confirm, and I will not repeat, but just complement. I would like to confirm what Janne is saying. The operational reliability and efficiency is our number one lever for two things: profitability improvement, but also growth. With better manufacturing efficiency and reliability, we have more demand to supply, particularly in the U.S. That's our number one lever. It's our absolutely obsessed priority right now, which doesn't mean, to your question about pricing, that we're not looking at all the other things. In answer to the previous question from you, from Nordea, I was mentioning that we are uncovering all stones, meaning everything around the cost structure, whether on fixed cost, on variable cost, on the portfolio, on the pricing, on the specific operational efficiency side by side. We're not letting anything uncovered.
That's why the assessment is taking quite some time because it's very easy to take one rapid action on one thing but leaving all the rest uncovered. We want to have a very systematic approach so that we truly transform the profitability from where it is to the right industry standard level.
All right. Got it. I have another question on volume outlook. You said that in Europe, the volume outlook is not as good as in the U.S. In the U.S. this year, you've had the tariff situation that kind of affected your volumes there. Do you already see this tariff situation induced stockpiling, this Chinese import situation? Do you see it already stabilizing now? I mean, you previously expected, we all expected that H2 would be a lot better in terms of volumes, and now the recovery was kind of postponed at least a bit. Do you already see in Q4 that the volume recovery in the U.S. continues? I think you mentioned that it's moist toilet tissue that grows, particularly in the U.S.
Yeah. It's a very interesting question. I think you said everything in the question. You gave the full answer in the question. I will rephrase it in different terms. Yes, tariffs add, the U.S. tariffs add an impact, but on H1. We're not talking about the tariffs having an impact on H2 or Q3. Yes, there has been some heavy stocking, I think, between March and April due to the U.S., to the tariffs at the time. Particularly, this stocking was from imports from China for obvious reasons. Now, this is how much you're asking, you know, stocking, is it still there? How much impact is still in the value chain? Honestly, we don't know precisely. I would not hide our performance of Q3 behind this argument of saying, yes, it's a lot of destocking from the Chinese imports of the first semester. I would not.
Do we have the data, specific data? No. Now, to your question, or the rest of your question, is Q3, I'm repeating what we said before, our volume was deteriorated by these two exceptional events. The market in Europe is what it is, but we had a relatively solid, versus the demand, we had a relatively solid quarter in Europe. The problem is our lack of supply in the U.S. linked to this incident and a few other operational constraints. Q4, without any incidents, is looking good from a demand point of view and particularly linked to the category that we mentioned before. There is no oversupply in the U.S., and there is demand for domestic production.
Okay. That's clear. That's all from me. Thanks.
Good, thank you.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time. I hand the conference back to the speakers for any written questions or closing comments.
Thank you. There are actually questions. Let's take them in an order. There is a question from Samu Wilhelmsson asking, given that the majority of the cost-saving program are expected to run by Q4, how much of these savings were realized in Q3 numbers and how much positive effect do you expect for Q4?
I think we've answered that question.
Yes, I can confirm what we said earlier. Roughly EUR 2 million positive impact on Q3, so third quarter. Naturally, we are aiming to push further so that we would be reaching the EUR 10 million. Naturally, there are cost items always impacting on both ways. That is the current record or speed on the savings.
Rauli from Inderes has asked if your adjusted EBITDA, excluding the incidents, would have been over EUR 6 million. Why are you expecting less than that for Q4? EUR 6 million would lead to a flat full-year adjusted EBITDA while you are guiding lower.
Yeah. It's a very good question. The first thing is Q4 is typically a lower quarter than Q3. Q4 is a lower quarter than Q3, typically. Second, we have indicated that the commercial ramp-up after this major incident in the U.S. has also affected the month of October. That's also a reason for being prudent about the fourth quarter. Because of those supply problems, we have short-term customer demand allocation, which we predict to be slightly unfavorable during Q4. It's not structurally changing the future, but Q4. That's why we have to be, based on what we know, prudent about Q4.
Okay. Another question from Rauli. Can you specify what was the impact of pricing, positive or negative, and what do you expect for Q4 on pricing?
I would expect pricing to be, in the competitive context, relatively unchanged in Q4 versus Q3.
Okay. Moving on to a question from Samu Wilhelmsson. Given that you faced also EUR 3 million negative effect from extraordinary events also in the comparison period Q3 2024, what would you say is a reasonable run rate in your comparable EBITDA in the current market environment?
Yeah. I think that relates quite well with Rauli's question that we just answered before. The run rate would be around EUR 5 million, EUR 6 million EBITDA. Q4 is not structurally the same as Q3 from a demand point of view. Also from a length point of view, many customers close early in December and so on. It's typically a lower month. As we said, the underlying business performance was relatively solid in Q3, and that should be the run rate going forward.
There is a question from Rauli from Inderes regarding receivables. Did you do a factoring arrangement or similar, or what enabled you to drive down the receivables quite significantly?
Okay. That's a good question on the working capital, and I can take that. Yes, we have had certain payment terms and similar types of arrangements, like a supply chain financing arrangement with the customers. One part of the AR development is, of course, that we have seen a reduction on the sales side. This is one of the areas where we have focused heavily on bringing in the effectiveness and reviewing the payment terms, payment behavior, and similar with the customers, coupled with certain, let's say, special arrangements in order to release the cash, but not going on details on each of the items.
Those were the questions from the chat. We would like to thank you for participating in this Q3 presentation and see you next time to hear about the full-year results on January 29th, 2026.
Thanks, everyone.
Thank you very much.