President & CEO’s review of the year 2022
2022 was a difficult year for Suominen. The unprecedented raw material inflation, which already had a significant impact on us in 2021, continued and energy costs increased in 2022 after Russia’s illegal invasion of Ukraine in February. Particularly Suominen’s US business suffered from the high inventory levels in the whole supply chain, where imbalance started to normalize only during the second half of the year. We made steady progress in the implementation of our strategy.
Klaus Korhonen, Interim President & CEO
We continued to implement our strategy published in 2020. The objective of our strategy is to achieve growth and improved profitability through sustainability, customer focus and efficiency. In 2022, we announced an investment to enhance and upgrade one of our production lines in Nakkila, Finland. The investment is made in line with our strategy and supports our vision to be the frontrunner in sustainable nonwovens. The investment project is progressing according to plan, and it is expected to be completed in the second half of 2023.
Our net sales reached EUR 493.3 million. Even though our sales volumes decreased from 2021, our net sales increased due to higher sales prices and exchange rates, the positive effect of which was EUR 32.9 million.
Our comparable EBITDA decreased significantly from the previous year and was EUR 15.3 million. The higher sales prices could not fully compensate for the volume loss and higher raw material and energy costs. To improve our profitability, we took several actions during the year, including implementing energy surcharges in Europe in March and September and a general cost surcharge in North America in August, as well as widening our product portfolio in the US.
Our strong ability to innovate and to meet market needs is reflected in the share of new products of our net sales, which exceeded 30%. By new products, we mean products launched less than three years ago.
Sustainability is an integral part of all our operations
Sustainability is the cornerstone of our strategy, and we continuously develop our product portfolio and operations accordingly. Our target is to increase the sales of sustainable products by 50% compared to the base year 2019 and launch over 10 sustainable products each year. In 2022, the sales of sustainable products were 99% higher than in the base year 2019, and we launched 12 sustainable products. These products include our first carbon-neutral product, BIOLACE® Zero. During the year, we also opened our own compostability test center, Green Lab, in Nakkila, Finland, to support our product development.
Occupational safety is a key priority at Suominen, and our target is zero lost time accidents. We work continuously to further improve our safety culture and share best practices. One concrete example of our successful safety work is that in June 2022 the Paulinía plant in Brazil celebrated a full decade without a single lost time accident.
Another people-related target is to strengthen employee engagement. We conducted our third consecutive employee engagement survey in 2022. The results will be used as a basis for concrete, goal-oriented development actions as part of our systematic work to improve employee engagement and development of a high performance culture.
We also want to use resources efficiently in our production and act in ways that minimize the environmental impact of our operations. We have concrete targets for reducing our greenhouse gas emissions, energy and water consumption and landfill waste. To give a few examples of our continuous work to decrease our greenhouse gas emissions, we switched completely to fossil-free electricity at all our European plants and installed solar panels at our Alicante plant in Spain.
In 2022 we completed the EcoVadis sustainability assessment for the first time and received a silver-level rating. This result places us in the top 8% of the companies in the manufacture of other textiles industry rated by EcoVadis.
Moving forward together
Looking ahead to 2023, we see several market drivers with a positive impact on Suominen. The raw material cost inflation has finally turned, the energy markets are showing signs of a price decline and in the US market, the inventory levels have normalized. However, it remains to be seen how the current high consumer-price inflation will affect the end-consumer demand for wipes. The wipes market has usually been rather steady, regardless of the general economic situation.
We will continue to implement our strategy on the basis of our five focus areas, which are Operational excellence, Sustainability leadership, Differentiate with innovation and commercial excellence, Great place to work, and Dual operating model. Every Suominen employee has an important role in the strategy implementation.
To conclude, I want to thank our shareholders, customers and business partners for their excellent cooperation. In particular, I would like to thank our employees for their strong commitment and hard work during the challenging year.
Interim President & CEO