Suominen Oyj

Hello and good morning from Espoo and welcome to the Suomenen Q3 results presentation. My name is Anu Ilvonen and I am the head of communications and marketing here at Suomenen. Joining me today are our president and CEO Charles Ölme and CFO Janne Silonsaari who will present our results and afterwards as usual there will be time for questions and answers. First I would like to hand over to Charles.

Thank you, good morning to all of you and thank you for joining our call regarding our Q3 results of Suominen. My name is Charles Eolme, 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 Hutemaki, the packaging global company based in Finland. I was the CEO of Hutemaki from 2019 to 2025. and 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, Latin America also. I'm very happy to join Suominen and to be today addressing you with our Q3 results together with Yane, our CFO. So 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 size of close to €100 million decreased by 11% in the quarter compared to €111.6 million last year, comparable period of last year. Yane will give us much more granularity on the variations and the reasons for this decline. The comparable EBITDA increased slightly from 3.3 to 3.4 million euro. And then the cash flow from the operations was 15.7 million euro during the quarter three. As I said, the performance in Q3 was significantly affected by exceptional events at two of our US factories. And 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 MTTA, 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 line in the US on the structural part of the production line, which has meant that that production line was out of production for two full month. and it includes also of course now the ramping up in terms of re-qualification of the nine into the commercial production and that ramp up has happened during the month of October. The second one, the second exceptional event is a floating in another of our U.S. factories, which has meant two things, an interaction 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. events at an impact of 2.8 million euro on the on the results of the three. And that means that if you exclude these two impact, then we could say that the ability of the three would have been a relatively solid, you know, above six million euro. Also, I would like to mention that our cost savings program has gained traction. This cost savings 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. 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 Calamar for about three years. he has worked as i said he brings international experience he has worked in france in poland in u.s and in sweden what he brings really to swimming is a very strong aspects i would summarize in three points number one transformational leadership number two a very systematic approach to continuous improvement methodologies and three a great people skills and leadership so we are very pleased to um to to let you know that he has accepted to join us and starting immediately therefore um comes at a very good point as we want to transform um our profitability in in the company going 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. So for the net sales, as it says, the sales decreased 11% during Q3 from the comparison period and amounted to 99.8 million euro. since volume decreased naturally driven by the incidents we faced that just opened up the margins increased. Currency impact coming basically from the USD euro conversion was negative 3.7 million on the top line. And share of the new products continued on rather stable level at 30% of the net sales. And your today's level, of course, you will see that after three quarters, our net sales have amounted at 317 million euro. and here we have net sales bridge on both third quarter and year to date level and we have opened the top line impact between organic exceptional events referring for the incident we faced during the quarter and then the currency and and similarly on the year to date level and our penalty impact basically includes volume price and mix impacts excluding the currency impact and then the exceptional items have been have been then separated on the analysis. Showing from where the comparison period quarter or year to date level and items impacting and leading to the actual 2025. Then on the comparable EBITDA, And as Charles said, it increased to 3.4 million from the comparison period, 3.3 million, but was negatively impacted by the incidents at US plants by 2.8 million euro. On top of that, the currencies had 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. and 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 so nothing major items so roughly 0.8 million from the IACs and cash flow from operations that amounted to 15.7 million euro in q3 and Turning you to date on on positive by 5.2 million euro Main driver was improved networking capital naturally lower sales are visible or at parts But we have been focusing on improving our efficiency on each working capital item and and this is visible especially now on q3 so on on this area naturally a a positive development which I'm I'm pleased to report and and then status update on the cost saving program update and and as as all know in way we announced a cost saving program with the targeted savings of 10 million euro at the annual level and in June we further announced that the program led to decrease of approximately 60 positions globally So saving action implementation has proceeded well during Q3 and we are on track to implement majority of the actions by the end of the year. So this is generally a, let's say, positive side on our actions to support then further improvement on the profitability. And 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. And basically statement as reading here is that the company now expects that its comparable EBITDA in 2025 will be lower compared to the 2024. And in 2024, Suominen's comparable EBITDA was 17 million euro. And now handing back for the for the studio. So for any questions, then please go ahead.