Spinnova is starting change negotiations and reducing its management team

Translation: Original published in Finnish on 4/14/2025 at 7:34 am EEST.

The news follows Suzano's decision in February to withdraw from the planned investments in Spinnova's fiber production. We are not at all surprised by the downsizing of the organization and the savings plans, as Suzano's decisions will at the very least delay the company's entry into the revenue-generating commercial phase. Thus, savings are necessary, but from the perspective of Spinnova's share, strategic choices and revenue growth play the main role.

The company plans to reduce a maximum of 35 employees and two members will leave the management team

Spinnova announced on Friday that it would start revision negotiations and reduce its management team. The scope of the change negotiations covers all Spinnova's employees except the executive management. According to the company's preliminary estimates, the revision negotiations may lead to possible changes in teams and roles, as well as temporary layoffs and redundancies. The estimated need for redundancies is a maximum of 35 people. The company estimates that the planned revision would bring annual savings of around 2.6 MEUR. The number of possible redundancies and their targeting will be specified during the negotiations. Spinnova employs 56 permanent employees.

The revision negotiations will begin on April 23, 2025, and are expected to conclude no earlier than June 4, 2025. According to the current estimate, the outcome will be implemented as soon as possible after the decision-making, but no later than December 31, 2025.

In addition, Spinnova announced that the company's CFO and Deputy CEO Ben Selby and Business Director Lasse Holopainen will leave the company's management team. They will continue to support the strategy work in various roles and will leave the company by the end of June 2025 at the latest.

Spinnova initiated a review of its strategy on February 28, 2025. Spinnova estimates that the strategic review will be completed in the next few months and will immediately inform the markets, including its financial guidance, thereafter.

Savings are necessary, but strategic choices are more interesting for the stock

The news follows Suzano's decision in February to withdraw from the planned investments in Spinnova's fiber production. We are not at all surprised by the downsizing of the organization and the savings plans, as Suzano's decisions will at the very least delay the company's entry into the revenue-generating commercial phase, and thus the company must conserve its cash reserves. In our estimates prepared in connection with the previous update, we anticipated the company would implement cost-saving measures, although the change negotiations are somewhat larger than we expected, and the savings may materialize slightly faster than we estimated. In our view, Spinnova can achieve total savings of over 3 MEUR with the planned reductions and the downsizing of the management team. From Spinnova's share perspective, however, strategic choices and revenue growth are more important, so we will revise our short-term cost estimate at the latest after the company's strategy update is published. We expect Spinnova to announce its strategy update before the summer holidays.