Sitowise Q3'25 flash comment: Sweden continued to drag down the overall group result

Translation: Original published in Finnish on 11/6/2025 at 9:32 am EET.

Source: Inderes

Sitowise reported an underwhelming result overall this morning, which also fell slightly short of our low expectations. The company's revenue declined by approximately 3%, and adjusted EBITA also declined slightly from the weak comparison period. Based on the reported results, Infra and Digital Solutions continued to perform well but the trend in Sweden remains clearly downward-pointing. The outlook remained largely unchanged in the various segments, and there was still no significant upturn in the order book. The net debt/EBITDA ratio, reflecting the current weak performance, rose to 7.2x, already a very high figure underscoring the need for successful performance-improvement measures.

Divergent development between segments again

Sitowise's Q3 revenue declined by approximately 3% in both reported and organic terms to 40.4 MEUR, whereas we had expected a decline of 1% to 41.5 MEUR. Infra grew by 4% to 16.1 MEUR, and Digital Solutions grew by 1% to 8.3 MEUR. Sales in the Buildings segment declined by 8% to 11.3 MEUR, and the Sweden segment continued its sharp decline of 19.5% to 4.8 MEUR. The varying sales trends across segments were broadly in line with our expectations.

The number of working days was the same as in the comparison period, so comparability was not affected by that this time, and acquisitions no longer significantly impacted growth figures. The utilization rate improved to 73.4% during the quarter (Q3'24: 72%) but remained slightly below the previous quarter (Q2: 74.2%) and is still far from the company’s target level of 78%.

Losses in Sweden appear to have deepened further

Sitowise’s adjusted EBITA for Q3 decreased to 1.7 MEUR (Q3'24: 2.4 MEUR), while our estimate was 2.1 MEUR. Verbal descriptions of the segments revealed that Infra continued to deliver strong profitability (over 12%), and the digital business also exceeded the group's targeted level this quarter, having approached it last quarter. Growth in the profitable product business boosted margins there, accounting already for about one-third of the segment's sales. The utilization rate for the digital business increased as well.

The Buildings segment continued to show a slight profit, as in the previous quarter, supported by the successful adjustment measures implemented. However, Sweden remained loss-making, and we believe its losses have only worsened from before. The company reported a clear improvement in utilization rates in Sweden's largest business line, structural engineering, thanks to earlier actions, but challenges persisted in other Swedish areas, particularly in building engineering. According to the company, achieving a profitability turnaround in Sweden requires substantial sales and order book growth from current levels. However, given the challenges in significantly expanding the order book under current market conditions, additional actions are needed to enhance organizational efficiency.

So far, no significant upturn in order book either

The company has not issued guidance for the current year, but it has commented on the outlook for the next 12 months across different segments. At the end of the last quarter, the outlook for Infra was described as stable. The outlook for Digital Solutions was stable and improving. The outlooks for the Buildings and Sweden were weak but improving. The outlook formulations now remain otherwise unchanged, but the outlook for Digital Solutions is now stable, with the word "improving" removed.

The reported order book decreased to 149 MEUR year-on-year (154 MEUR) but increased slightly from 148 MEUR in the previous quarter, meaning that there was no further decline. As expected, the company reported that at the end of September, order books were at a good level in the Infra and Digital Solutions businesses, while in the Buildings and Sweden business areas, order books were at low levels. The company expects the technical consulting market environment to remain mixed in the coming months. Good demand for services related to green transition, security, and digitalization will support business performance especially in the Infra and Digital Solutions business areas. In the Buildings business area, there have been signs of moderate recovery in the construction market, and we believe that the market bottom is behind us. However, the company expects the construction market recovery to be slow and materialize on a larger scale only in 2027. There is uncertainty related to the timing of the Swedish construction market recovery, but it is generally anticipated to take place in 2026.