Good day, and welcome to Suominen's Q1 2023 result publication. My name is Emilia Peltola, and I'm heading Suominen's communications and investor relations. Today, here with me are our new President and CEO, Tommi Björnman, and interim CFO, Sirpa Koskinen. As usual, after the presentation, there is time for questions and answers. Before Tommi will start the presentation, I ask you to say a few words about yourself.
Okay. Good morning, everybody, and welcome also on my behalf for this, my first review after 35 days in the company. Just a few words about my and my experience. I have been roughly 30 years in the industry. If we want to be very specific, more than 25 years in nonwovens. My background a little bit is something that, the longest assignment or work what I had is, of course, I was shy 17 years with Ahlstrom. My two latest assignments were I was four and a half years roughly in Israel running Avgol Nonwovens, and before that, three and a half years in Saudi Arabia running Mada Nonwovens. I have a fairly good understanding of the industry. Of course, I have not directly been working, you know, with the, with the wipes customers.
Some of them, yes, mainly for the branded side. It's very nice to be here and learn a little bit more about the wipes business and the, you know, the opportunities what we have ahead of us over here. Maybe, Emilia, we could continue. Yes. Okay. That, we continue with the normal agenda what we had. We have a first briefly some key takeaways from first quarter, then we will look at the financial review, look at a little bit the highlights of the strategy, and then a few words about the outlook. In order to look at a little bit the key takeaways of that, the first quarter was sales-wise, it was, I would say, satisfactory. We were able to generate EUR 6.5 million better sales than comparable time last year.
While, of course, it was a little bit disappointing was something the comparable EBITDA was EUR 0.7 million less compared to last year. Maybe, you know, what is also very important that we were able to better to manage our cash flow, so we were able to generate EUR 6 million more cash flow compared to the first quarter 2022. Of course, over here we have a little bit more detailed information. Looking at the development of the top line, so especially looking at what is the way we are year-to-date numbers and then in comparable to the quarter. Here, over here, once you look at the first quarter numbers, so we need to remember that in those numbers, it's included also the 2 strikes.
We had a strike in Finland at the ports, as well as linked to the Mozzate plant close, we had a strike on Mozzate's side, which impacted also our top line. Of course, in the numbers a little bit later, we will come to the raw material impact more. Of course, sales prices were increased, but we were not able fully to compensate the raw material costs in the prices. Maybe the one thing to mention which is not bold here directly, it is something if we look at the share of the new product sales. It was a bit more than 40%. This is the highest ever if we look at the strategy period, which started from 2022. This gives a good platform once looking for the future.
Just reminding you that how we calculate the new products, it is the products which are less than three years old. You know, if we look at a little bit the, on the EBITDA a little bit more detailed, so on that. The challenge what we had, it is mainly to coming through the, our pricing mechanism, which we call lag. It was something we were able to correct our sales prices, but mainly due to the lag, so that it was not fully following through to the numbers. That was actually generating us a bigger gap in our EBITDA numbers. Of course, in the numbers was something that we wanted to show here that, you know, also the currency had a small impact on positively in our numbers.
Generally speaking, that is mainly that, the disappointment which came through the pricing mechanism and lag. Over here, it is something that now once you look at a little bit the hard numbers, especially that I'm not going to go through all the lines, but maybe just to pinpoint the cost of the goods sold line. Making the comparison from the first quarter 2022 to first quarter 2023, you may see the impact which is coming through the raw material pricing. Of course, that it is something that, you know, in, in the coming quarters and months, of course, that is something that we are expecting to have some relief on that side.
Then maybe the most positive news what we have on this quarter together with the good new product sales is the operative cash flow, which was positive EUR 3.3 million and EUR 6 million better than the previous quarter in the beginning of 2022. You know, generally speaking, it was something that we had a little bit tighter networking capital control. This is of course the aim once going forward is because of the market instability, it is very, very important that we control the cash flow once going forward. You know, as normally, we have had some, you know, highlights coming from the strategy and the sustainability. On the strategy side, if we look at that, it is more or less remaining the same mission, vision, strategies, our strategy focus areas and values.
They remain the same and we drive the company towards, you know, to become and to be the forerunner of the nonwovens innovations, and especially on the sustainability area. Maybe, you know, that in order to look at that or something that, you know, we want to also enhance our commercial excellence and innovation and very good signs of that was something that in February we organized a sustainability and new fiber seminar in Nakkila. The participants, we had roughly 50 people, which showing the high interest of the new products. It was very successful, and there were stakeholders from the different parts of the value chain. All in all, we had an excellent feedback by organizing this type of focused meetings with our key customers and stakeholders.
Maybe the second one, which is actually I'm very proud for the organization and for Suominen, EDANA organized in the category, in this category the second time the award. We had an opportunity to win this award for the second time in a row. That has been organized twice, and we have both times we have won the award. This is our new product, Circula, which is based on the recycled pulp used in the material, which they consider that it was a good groundbreaking idea in the nonwoven field that using also recycled pulp in the nonwoven products. Of course, this is a sign of the good work done around the sustainability and the innovation.
Maybe now just at the end of the presentation, just to repeat more or less that what has been our outlook for 2023, it is something that we expect that our comparable EBITDA compared to 2022 in 2023, it's going to increase. Just as a reminder, the EBITDA in 2022 was EUR 15.3 million. Maybe I will hand it over now back to Emilia, that if there are any questions, I'm happy to answer those questions. Really it was very nice to e-meet you. I'm looking forward to meet you in person one day.
Thank you, Tommy. Yes, now it is time for questions. Let's first take questions from the line. Do we have any questions?
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Joonas Ilvonen from Evli. Please go ahead.
Hi, it's Joonas from Evli. I have a question related to... I mean, you mentioned tough competitive environment. Does that refer specifically to Europe, or how do you see the competitive situation in the U.S. at the moment?
Yeah, very good question. Thank you for that. If we look at the competition generally, so that actually that has become more, you know, fierce in all of the regions. The main drivers of course, was something that this is the, let's say, back draw coming from the COVID period. Once the market was booming, a lot of companies decided to increase the capacity. Now we will see once these lines are coming to the business in the situation when the total market is unstable. This creates a more or less a little bit changed competition picture in all of the markets. It's applicable, you know, in all the markets across the globe.
Why I'm able to say this, of course, because in my previous company, we were operating on the same field, in the hygiene field. We were supplying mainly the components for the diapers, but of course that it's going more or less to the same end uses as the wipes.
Right. When it comes to new product sales, the share of new products, would you say that you have made more progress in the U.S. or better progress there compared to Europe? Are there any major differences in this sense?
Maybe, you know, just I can't remember if on my head all the, all the numbers where we are, but generally speaking, I can say that I have met all the main customers during the 34 days or 35 days that I have been in the company, have had opportunity to meet them. I would say that the activity level is very, very good in all of the markets. But unfortunately, I don't have any numbers in my head in order to be able to share with that. But that is something that maybe in the coming presentations we can a little bit more highlight if that would be good for you to see.
All right. You are basically still expecting, good volume recovery, especially in the U.S. this year. How did the Q1 volumes in the U.S. look like compared to your own expectations?
If you look at generally speaking, the first quarter was a disappointment, it's no doubt about that. I would say generally speaking is something that we have. We are fairly optimistic once we look at the second half of the year. The first half of the year will be a little bit more challenging. It's unstable. It can be a little bit more volatile. Sometimes you say it's a little bit bumpy road. Now we have a bumpy road. The expectation is once we go forward it will release a little bit as well, you know, the actions and the activity of what we have in place, we would be able to see effects of those.
Just in a nutshell saying that, you know, the, the near future will be, you know, challenging, but the expectation for the second half is somewhat more positive.
Maybe a final question related to your current cost structure. You have just completed the Mozzate plant closure. How do you see your current cost structure, assuming that you will get this volume growth comes through towards over the course of the year or so? Is it like already? Are you happy with your current cost structure, assuming that you get some more volumes?
Yeah. Of course that, you know, the decision in order to make such a drastic change in order to close a site, of course, it's always a disappointment. There are good reasoning, like you already indicated, so that we needed to take care of our cost structure. Of course, the expectation what's going for the future is something that we are expecting to be more efficient, not only in our cost structure, but also in all efficiencies coming from the operation. Expectation is something that, yes, it will. The situation should improve also internally, which the cost which is in our control. Of course, we try to drive also more activity on the market and customer side.
Okay, good. That's all from me. Thanks.
Thank you. Good questions.
Are there more questions?
The next question comes from Harri Taittonen from Nordea. Please go ahead.
Yes. Good morning. Yeah, just a follow-up on these previous questions. Perhaps the U.S. situation, I think it was a story which evolved during the last two years that the kind of the inventories were high at some end-user segments, and then it started to look better. Just wonder how that is going on. Now I think there was also some improvement in the sort of the versatility of your production lines in the U.S. so that you were able to cater for sort of the wider customer segment. So, maybe if you can give color on that one, that would be the first question. The second one is on the working capital. I mean, is it something that...
I mean, you did well now, for sure. Do you think that there's going to be help from the cycle in this year? I think, looking back, there was quite a bit of an increase in or tie-up in working capital in two years ago and then some positive developments last year. How, how would you see the possibility to, sort of, lower working capital for the rest of the year with the kind of prices and cost coming down?
Harry, again, you know, excellent questions. If you look at the North America.
Thank you.
Generally speaking, it was very, very true though what happened in North America. During the COVID, the market was booming and everybody was loading. The pantry loading was very, very high in North America. Of course, once the market started to stagnate and plummet, it had a direct impact for the whole supply chain, not only for us, but also our customers. We still have a little bit impact coming from there. It's not fully melted everything away. We see some light in the tunnel. Of course it. We will see that little bit in the near future. Maybe after the second quarter, we would have a better visibility on the market.
Like said, there is a high volatility at the moment. The sentiment is, I would say, fairly positive, but there is so high volatility that it's very difficult in order to draw the, the picture. If you look at now that, order intake and generally speaking, that how we receive the orders, it's fairly short sight. It is not as long as it used to be. Maybe this is the indication that once going forward so that once we have a better visibility through the pipe, so then we can draw a little bit better conclusions. Coming to your second point linked to the working capital, I would say that is very natural in these type of situations.
Once the market is unstable, let's say we have a little bit headwind here and there, and we are a little bit uncertain about the inflation, how it's going to hit, et cetera, how it's going to impact on us, then we need to focus ourselves that the areas which is in our control and working capital is one of them. Because we wanna secure also the possibilities to invest in the future, and that is a very natural way of making the system so efficient so that we would be able to self-sufficiently finance our coming investments. So I'm not making any statements, but I would say that this is a very typical way how the companies are looking in these type of circumstances, and we do the same.
Okay. Excellent. Thank you.
Thank you, Harry.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you very much. It seems that there are no questions from the chat either. Before we end this session, I want to thank you, Tommy and Sirpa, all the participants, and then advertise our Q2 result that will be published on August 9th. Thank you, everybody, and have a good day.
Nice to e-meet you. Thank you. Bye-bye.
Bye.