Papoutsanis: Turnover for 2023 announced
PRESS RELEASE
January 23th 2024
Papoutsanis: Turnover for 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 2023.
Turnover stood at € 62.3 million (compared to € 70.7 million in the corresponding period in 2022), i.e. a 12% decrease, with the value of exports representing 55% of total turnover.
Despite the drop in turnover, when it comes to profitability Management expects improved financial results in 2023 compared to those for 2022, since in 2023 Q4 the highest profitability for the year will be achieved, compared to 2022 Q4 which was loss-making. This improvement is primarily the result of a correction in the price of materials and energy. Completion of the company’s robust investment plan over the previous three years, which has achieved a significant reduction in the cost of industrialisation, is also contributing to this. The latter has had a positive impact on profitability indicators while at the same time bolstering the prospects for growth in turnover via new agreements, since it creates the conditions for the company to manufacture top quality products at competitive prices.
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 production planned to commence in February 2024 and full implementation to be achieved by Q3. It is estimated that this agreement will contribute additional sales of around € 6 million each year, and there are significant prospects for further expansion.
In 2024 turnover is expected to grow and profitability will improve further, driven by all four categories in which the Company operates.
In Greece turnover stood at € 28.1 million in 2023, up 15% thanks to the significant growth in the category of branded products and sales on the domestic hotel market. Abroad there was a 26% drop which primarily came from the third-party production category due to the abolition of SKUs by multinational customers as a result of the increase in cost and the corresponding squeeze on profit margins for the specific SKUs. In the soap base category, the drop was due to the normalisation of demand after the very high levels of demand noted in 2022 which were due to delays and increased transport costs from third countries at that time.
Regarding the contribution of the four activity sectors to 2023’s turnover figures, it should be noted that 27% of total revenue comes from sales of Papoutsanis branded products in Greece and abroad, 17% from sales in the hotel market, 40% from third-party product production, and 16% from industrial sales of specialty soap bases.
Overview by Activity Sector
Branded products: The category grew strongly by 36% compared to 2022, more than covering losses from the drop in the antiseptic market (-48.6% in value in organised retail trade in 2023 compared to 2022). Excluding antiseptics, the rise in the branded products category is 53.4% due to the organic development of Papoutsanis' mass distribution products and the positive contribution resulting from acquisition of 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 32% compared to the corresponding sales in 2022, though that figure must be viewed against the high achieved in 2022 which was due to the then opening up of business trips and the tourism market after two years of restrictive measures due to the pandemic. Sales of our branded products to hotels on the domestic market did however rise by 17% compared to the same period last year making up for part of the drop in sales abroad.
Third Party Products (Industrial Sales, Private Label): Sales in this category were down 11%, 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 with a low profit margin being dropped. At the same time, as mentioned above, the Company is in negotiations over new partnerships which hold out good prospects; some of those negotiations are in their final stages and will bolster the category from the start of 2024.
Industrial sales of soap bases: In 2023 there was a 32% 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.
Mr. Menelaos Tassopoulos, CEO of Papoutsanis S.A., said: "The strategy of outward-looking development with four distinct pillars, with emphasis on creating and offering innovative, quality products that meet consumer needs, is a strong factor in the Company’s success and creates positive prospects for the years to come. Despite the shortfall in sales for this year compared to last year for the reasons explained above, in 2023 we achieved positive developments with three key strategic goals: significantly improving our financial results; dynamically bolstering the participation of Papoutsanis branded products (consumer and hotel products) in overall Company sales; and, of course, laying down strong foundations for new partnerships with multinationals and smaller companies. All this, coupled with the skill and commitment of our staff, fills us with optimism about how we will perform in 2024.”