The first six months of 2024 were categorized as “eventful” for Spinnova , as put delicately by CEO Tuomas Oijala in the Finnish textile fiber firm’s half-year report.
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Considering that the disappointing financial review of 2023 resulted in management shakeups, job cuts and a redirecting of focus to technology , “eventful” is evident. The half-year report revealed Spinnova’s revenue dropped by nearly 96 percent year over year.
Per the report, revenue between January and June hit 362,000 euros (about $403,000). For the same six-month period in 2023, Spinnova clocked 8.8 million euros (about $9.8 million).
“During this period, most of the revenue was derived from sales of technology services to Woodspin’s production facility and to Respin ,” the report reads. “Revenue decreased significantly compared to 2023 as the technology project to Woodspin’s production facility was completed last year.”
The operating loss hit 9.9 million euros (roughly $11 million), down from 10.9 million euros (just over $12 million) year over year. This decrease was attributed to the aforementioned layoffs as well as an “overall lower level of other operating expenses” and cost-cutting programs implemented.
“Organizational restructuring is always challenging for a company and its employees,” Oijala said in the report. “We had to say goodbye to many talented people, but as an organization, we have emerged stronger with clearer roles and responsibilities.”
Investments totaled 3.2 million euros (about $3.5 million) and “continued to be primarily into the Woodspin joint venture ,” down about 42 percent from last year’s 6.05 million euros (roughly $6.7 million). The Adidas collaborator’s net cash position “remained strong,” totaling 46.6 million euros (about $51.7 million) at the end of June, a near 15 percent dip from last year’s 54.4 million euros ($60.4 million).
Regarding profitability, Spinnova posted a loss of 9.15 million euros (almost $10.2 million) for the period, compared to a loss of 10.56 million euros ($11.7 million) in the first half of fiscal 2023. The company’s earnings per share (EPS), both diluted and undiluted, stood at minus 0.18 euros ($0.20), compared with minus 0.20 euros ($0.22) recorded year over year.
As part of the strategy review, the H&M collaborator set new targets for the short, medium and long term and “streamlined” its organizational structure to support effective strategy execution.
“We aim to be EBIT positive in the medium term (2028-2030) and we expect no need to raise additional external funding to reach our strategy targets,” Oijala said. “This target underlines the strong belief we have in the new technology sales strategy, which is capital-light compared to investing in fiber production ourselves.”
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For the remainder of the year, Spinnova projects revenues to be lower than in 2023, noting that the operating result is expected to improve while continuing to be negative.
“The timing of revenues is linked to the timing of technology sales and delivery of the next production facility,” per the report. “The total of Spinnova’s personnel expenses and other operating expenses is expected to be lower in 2024 than in 2023.”
But the first half of the year wasn’t a complete wash.
In March, the Marimekko partner signed a letter of intent (LOI) with Brazilian manufacturer Suzano for its wood-based production factory. According to the LOI, Suzano plans to own and operate the next wood-based fiber production facility on its own site, with Spinnova supplying the technology. The pre-engineering phase of the planned factory is expected to begin in the second half of the year, Oijala said. And in July, Spinnova signed another LOI , this time with premium shoe brand Ecco , to scale Respin’s leather waste-based fiber.
Earlier this month, Spinnova named machinery manufacturer Valmet as the exclusive partner to supply fiber processing equipment to Spinnova’s technology customers, underscoring Spinnova’s belief that technology sales are a “valuable driver for rapid cash generation,” as said by co-founder Janne Poranen in the company’s 2023 annual report.
And brand partnerships picked up, too.
Bestseller launched T-shirts under its Jack & Jones brand in April, signifying the first commercial product made with Spinnova fiber produced at Woodspin. Spinnova fiber was featured by two countries in the 2024 Summer Olympics , with collections created by Jack & Jones and Vero Moda (also under the Bestseller umbrella) for Danish athletes and by Rukka for Finnish athletes. A commercial product from the Ecco and Respin partnership is expected by early 2025.
“We continue working systematically with apparel brands to develop longer-term plans for increasing the industrial adoption of Spinnova fiber,” Oijala said. “As we move forward, we remain committed to our strategic objectives and look forward to achieving new milestones together.”
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