Papoutsanis: Turnover for Q3 2023 announced
PRESS RELEASE
October 18th, 2023
Papoutsanis: Turnover for Q3 2023 announced
New partnerships and major improvements in the branded product category
Papoutsanis S.A., leading Greek soap and liquid cosmetics company in Greece and one of the largest manufacturers in Europe, has announced its turnover results for Q3 2023.
Turnover for Q3 2023 stood at € 47.4 million compared to € 53.3 million in the corresponding period in 2022, i.e. down 11%, with the value of exports accounting for 53% of total turnover.
In Greece turnover stood at € 22.2 million, up 21% thanks to the significant growth in the category of branded products and sales on the domestic hotel market. Abroad there was a 28% drop, primarily due to the third party products category following removal of SKUs by multinational customers as a result of cost increases. The drop in turnover in the soap bases category is due to the increased demand noted in 2022, which can be attributed to the higher cost of transporting them from third countries. It is worth noting that this category rose by 16% this year compared to the same period in 2021.
As part of its strategic goal of increasing turnover, the Company is in negotiations with multinationals and other smaller companies operating in the soap and cosmetics sector. In that context, an agreement with a large multinational is in the final stages of implementation, with collaboration set to start in Q1 2024 and full implementation by Q3. It is estimated that this agreement will contribute additional sales of around € 6 million each year, and there are major prospects for further expansion.
Regarding the contribution of the four activity sectors to total figures, it should be noted that 27% of total revenue comes from sales of Papoutsanis branded products in Greece and abroad, 20% from sales in the hotel market, 38% from third party product production, and 15% from industrial sales of specialty soap bases.
Overview by activity sector
Branded Products
The category reported strong growth of 53% compared to Q3 2022, exceeding the losses from the drop in the antiseptic market (-54.8% in value in organised retail trade for the eight-month period January-August 2023 compared to the same period last year). Excluding antiseptics, the rise in the branded products category is 78% due to the organic development of Papoutsanis' mass distribution products and the positive contribution made by the ARKADI soap factory. Papoutsanis personal care products are already gaining a significant market share in Greece and at the same time have more than doubled their sales abroad, and hold out significant prospects for further growth.
Hotel products
Hotel product sales dropped by 24% compared to the corresponding sales figures for Q2 2022, though sales to hotels on the domestic market increased by 16% compared to the same period last year, which in part made up for the drop in sales abroad. These sales figures should be compared to a high Q3 2022 figure which was due to the resumption of business travel and the re-opening of the tourism market after the pandemic.
Third-party products (industrial sales, private label):
Sales in this category were down 18%, a trend driven by foreign sales. In foreign markets, and above all in Europe, major inflationary pressures over the last year led some of our multinational customers to redefine their strategy and re-evaluate their product portfolio, resulting in certain SKUs being dropped and demand falling. At the same time, as mentioned above, Papoutsanis is in discussions about new partnerships with very good prospects, which will bolster the category from the start of 2024 onwards, both inside and outside the EU, where additional growth opportunities have been identified.
Industrial sales of soap bases
In Q3 2023, there was a 33% drop in this category (which primarily relates to foreign customers), mainly due to non-sale of the commodity soap bases manufactured in SE Asia. In 2022, by exploiting increased transport costs and long delays in deliveries from Asia, Papoutsanis was able to meet part of the overall demand in Europe, Africa and the Middle East for similar soap bases. Transport costs and delivery times from Asia have now returned to normal, but that specific set of circumstances allowed Papoutsanis to develop remarkable partnerships with significant potential, which can only bolster this category.
Business Outlook
Mr. Menelaos Tassopoulos, CEO of Papoutsanis S.A., said: «The strategy of developing and offering innovative and quality products that meet the needs of consumers combined with extroversion create positive prospects for Papoutsanis. Despite the lag in sales in the nine months compared to the previous corresponding period, for the whole year we foresee improved financial results compared to last year. At the same time, the acquisition of ARKADI, the branded products, the hotel market and the cooperation agreements with multinational clients give a positive sign and will strengthen the development of our activity in the coming years as well».