Papoutsani’s revenues increased in the first half

At the same level (2.5 million euros) as in the first half of 2021, the profits after taxes of Papoutsanis were formed in the first half, while the increase in exports and turnover during the same period was significant.

In particular, the turnover was 33.6 million euros showing an increase of 39%, the profits before taxes increased by 9% to 3.3 million euros and the EBITDA increased by 22% to 4.9 million euros.

Mr. Menelaos Tasopoulos, Managing Director of Papoutsanis ABEE, commented on this:

“During the 1st Half of 2022, Papoutsanis remained focused on its business plan with the aim of strong, sustainable growth and continuous enhancement of turnover while improving its profitability, as well as optimizing production with a view to reducing costs We continue to constantly adapt to new data, implementing a growth strategy in four distinct pillars, expanding our portfolio into new categories and markets, strengthening long-term relationships and partnerships with strategic customers and suppliers, and continuing to invest in equipment, know-how and human resources. potential. Despite the challenges in the macroeconomic environment and geopolitical tensions, we remain optimistic for the year as a whole.”

Results overview

During the 1st Semester of 2022, Papoutsanis recorded growth in its turnover by 39% which amounted to 33.6 million euros compared to 24.2 million euros in the corresponding period of 2021.

This significant increase in turnover during the first half of 2022 is attributed to the restart of the hotel market in Greece and abroad and to the high performance of industrial sales of special soap masses abroad and producers for third parties, combined with increases in selling prices (mainly of the last two categories) in order to pass on the cost increase as much as possible. In this context, comparing the half of 2022 with the corresponding period of 2021 the 39% increase in sales is attributable to 22% to an increase in sales volume compared to 2021 and 17% to an increase in prices.

Exports amounted to 22.2 million euros in the first half of 2022, representing 66% of the total turnover and recording an increase of 54% compared to the corresponding period last year.

Gross profit was positively affected by sales growth in the current period and amounted to 9.8 million euros compared to 8.0 million in the corresponding period of 2021, showing an increase of 22%. In contrast, the gross profit margin decreased to 29.3% compared to 33.2% in H1 2021, mainly affected by the significant increase in energy costs (electricity and natural gas). During the first half of the year, the additional cost of energy for the company was approximately 1.0 million euros, which translates into an increase in the gross margin by almost three percentage points (3%) compared to last year.

Profits before taxes amounted to 3.3 million euros, compared to profits of 3.0 in the First Half of 2021. It is noted that the results of the semester have been burdened with a non-recurring loss of 384 thousand euros, as it arose after the issuance of arbitration decision regarding the termination of the cooperation with the company Elgeka SA, which until the end of 2020 distributed Papoutsani’s branded products to the large retail chains.

Profit after tax amounted to 2.5 million euros and was at the same level as in the first half of 2021

The results before taxes, financing, investment, non-recurring results and depreciation amounted to profits of 4.9 million against profits of 4.0 million euros in the 1st Half of 2021, increased by 22%.

15% of total revenue comes from sales of Papoutsani branded products in Greece and abroad, 20% from sales to the hotel market compared to 8% in the corresponding period last year, 44% from production of products for third parties and 21% from industrial sales of soap bars.

It is worth noting that during the First Half of 2022 the prices of raw materials/packaging materials, transportation and energy continued their upward trend that had already started since the Second Half of 2021, while the difficulties of securing the necessary quantities in specific categories remain materials. At the same time, the ongoing war in Ukraine increases the pressure on some of the raw materials produced there and mainly on energy costs, while of course the uncertainty regarding the general development of the economy is constantly increasing. Already, unprecedented inflationary pressures across all goods combined with the continued rate hikes by central banks are significantly affecting consumption internationally.

Overview by Activity Sector

Branded Products: The category shows a decrease of 8% due to the significantly downward trend of the overall retail market and mainly the market of antiseptic products. It is worth noting that in the Greek market during the first half of 2022, the categories in which Papoutsanis operates saw a total drop in value of the order of 8.5% compared to the corresponding period of 2021, with the largest losses recorded in the category of antiseptic products (-33.9%). Excluding the antiseptic, the sales value of Papoutsanis brand products shows an increase of 8%, “running” faster than the market and therefore gaining a significant share.

Hotel Products: A significant increase in sales by 236% compared to 2021. This category in the corresponding period last year moved at very low levels due to the impact of the pandemic, while this year the relevant sales are increasing both in Greece and abroad.

Third Party Products (Industrial Sales, Private Label): Sales increase by 15% compared to 2021. The increase came from the significant strengthening of partnerships with multinational companies for the production of their products and the continuous development of the variety of product categories offered by Papoutsanis.

Industrial sales of soap masses: There was an increase of 86% in the 1st Semester of 2022 in this particular category which mainly concerns exports. The development is due to the international consolidation of Papoutsanis in the sector, the expansion of the clientele as well as the continuous strengthening of the offered products. In order to serve the growing needs, the new soap mass production unit, which has been put into operation since the Second Semester of 2021, has already succeeded in doubling the production capacity of Papoutsanis, while with the availability of synthetic soap masses, products with a reduced environmental footprint, the Papoutsanis offers specialized solutions in this market.

Business perspective

Despite the fluid environment, Papoutsanis remains focused on its goal of strong, sustainable growth and the continuous strengthening of its turnover while improving its profitability. In this direction for the Second Semester of the year:

• Estimates for the course of hotel products are particularly positive and an enhanced turnover compared to that of 2019 is expected.

• In the branded products market, which has been showing a decline since the first half of the year, the goal is to strengthen the position of Papoutsani’s products in consumer preference by gaining share and the company’s entry into new categories.

• In the categories of third-party producers and soap mass, the goal remains to maintain and expand the clientele and partnerships as the company continuously improves productivity and reduces production costs

• For some product categories additional price increases have already been launched which for the second half of the year lead to an additional average increase of 4% – 5%

Based on the above and despite the various difficulties that have already been analyzed, it is estimated that the Company will continue its development path in the second half of the year, provided that there will be no further significant deterioration, mainly in terms of energy efficiency.