Papoutsanis – Responding to the energy crisis and the rise in raw materials prices

Considering that both this year and next will close with a positive sign for the company, Papoutsanis‘ management is going to reduce the impact of the rise in raw materials and energy by reducing production costs, reducing operating costs, and especially disposal costs and large-scale transfer of price increases.

The above are included in the company’s response to the Hellenic Capital Market Commission, following a relevant question from the latter.

Specifically, Papoutsanis in an announcement states the following:

Following the letter of the Hellenic Capital Market Commission which was notified to the “PAPOUTSANIS SOCIETE ANONYME INDUSTRIAL & TRADE CONSUMER GOODS” (“PAPOUTSANIS” on 09/11/2021, regarding PAPOUTSANIS makes the following announcement which is essentially a republishing of information, which have already been presented in the summary financial briefing of the Board of Directors for the period 1.1.2021 to 30.9.2021, which was published on November 1, 2021 .

1. Revenue from sales, earnings before interest and taxes (EBIT), and earnings before interest, taxes, depreciation and amortization (EBITDA), for the third quarter of fiscal year 2021 and on a cumulative basis, as well as the corresponding comparative figures of last year period.

2. Significant changes in the borrowing position and / or capital structure as well as other figures of the financial position, which took place during the third quarter of 2021

As at 30/9/2021, there were no significant changes in the loan position and / or capital structure, as well as other figures of the financial position of the Company in relation to the corresponding figures as at 30/6/2021.

3. Impact of Covid – 19 spread

For Papoutsanis since the beginning of the health crisis, the safety of its employees and associates is an absolute priority and constantly monitors the evolution of the pandemic and expands and enriches the measures it is taking in this direction. At the same time, demonstrating rapid reflexes, flexibility and adaptability, the company reacted dynamically, continuing the strong growth course of recent years, with high performance in the nine months.

4. Impact of the energy crisis

The Management is closely monitoring the developments in the market of raw materials and energy and estimates that it will limit their impact through:

The reduction of production costs, as a consequence of its investment plan of the last two years, the reduction of operating costs, and especially the disposal costs which were extraordinarily borne this year by high transport and storage costs due to the deposition of products in third party facilities, in order to build the new warehouse with capacity suitable to support the growth rate of the Company.

To a large extent the increase in prices of raw materials and packaging materials. Here the Company, despite the obvious pressure from the above increases, is in a relatively more advantageous position since more than 65% of its sales are made through contracts where the price adjustment is provided contractually (open book costing).

Assessment of the development of activities during the fourth quarter of the fiscal year

For the last quarter of the year we estimate that we will achieve further significant growth compared to the corresponding quarter of 2020. We therefore forecast for the whole year a higher growth rate compared to that of the current nine months, thanks to the new collaborations that are in progress and the improvement of the growth rates of the hotel market in Greece and abroad. At the same time, the completion and full integration of most of the investments of the last two years in the production process as well as the operation of the new warehouses will lead to a significant reduction of production and distribution costs.

Business Perspective

Management’s estimates for next year’s growth rate and profitability are also positive, and are based on:

In strengthening the position of branded products at points of sale with the strategic goal of the Company the further improvement of market shares.

In the further normalization of the market of hotel products in Greece and abroad, in the expansion of collaborations with multinational companies in the category of producers for third parties with whom the Company maintains a long-term relationship, but also with new customers, enriching the range of products with new innovative products mainly in the direction of sustainability.

In the development of the category of soap masses through the expansion of the clientele but also through the new category, synthetic soap mass.