Solwers H2'25 flash comment: Expected earnings turnaround has not yet materialized

Lähde: Inderes

Translation: Original published in Finnish on 3/5/2026 at 9:35 am EET.

Solwers published its H2'25 report this morning. The company's revenue and EBITA were stabilized during H2, but the earnings improvement we expected did not yet materialize by the end of the year, which was disappointing. The outlook guided for an EBITA improvement, but based on the comments, more robust earnings growth from the company will have to wait, and our market-dependent forecasts have downward pressure. We expect to receive more detailed comments from the company regarding the market situation in the webcast starting at 12 noon (EET).

Contrary to our expectations, growth was not achieved at the end of the year

Solwers’ H2’25 revenue remained close to the comparison period’s level at 38.2 MEUR, whereas we had expected it to grow by 6.7% to 40.9 MEUR. The company stated that the development reflected a challenging market environment, but we did not find a single clear reason for it in the report. The order book has been on the rise since the beginning of the year, and we had anticipated this to positively impact revenue in the latter half of the year, but this did not materialize. The company stated that positive development was seen in companies offering specialized services in both Finland and Sweden. Based on the comments, the underperforming units were, as expected, Swedish companies serving the industrial sector (e.g., ELE Engineering).

EBITA continued to flatline

We expected Solwers' H2'25 adjusted EBITA to rise to 2.6 MEUR (H2'24: 2.2 MEUR), but it remained at the comparison period's level of 2.2 MEUR. For Q4, the EBITA result also remained at the level of the comparison period (Q4'24: 1.0 MEUR), whereas we had expected earnings growth to pick up towards the end of the year. Based on the report, employee utilization rates improved as expected, but it also appeared that the cost-saving program, which had already generated 0.3 MEUR in cost savings in the previous quarter, did not provide similar support in Q4. Based on the comments, continued fierce price competition created headwinds for profitability.

The company's net debt settled at 27 MEUR, while we anticipated 29.7 MEUR. It appears that the purchase prices paid for the December acquisitions were more moderate than we anticipated. Cash flow from operating activities was also at a good level in H2 (3 MEUR). According to our calculations, the company's net debt/EBITDA ratio remained at around 5x, but earnings growth should start to materialize soon to bring the ratio down.

The 2026 outlook does not provide adequate support for our robust earnings growth expectations

The most important takeaways from the report were the comments on the 2026 outlook, which did not provide adequate support for our strong earnings growth expectations. The company stated that acquisitions completed at the end of the year and an increased order book create conditions for better performance in 2026. The company stated that it expects EBITA profitability to strengthen from the previous year.

At the same time, the company stated that the year has started in challenging conditions and growth in 2026 is expected to focus particularly on infrastructure and specialized engineering services, as well as technical services for the built environment, and that performance is expected to improve as the year progresses. Despite the increased leverage, the company intends to continue making moderate acquisitions, with a particular interest in expanding into the Polish market.

Before the report, we predicted a clear improvement in the company's EBITA to 7.2 MEUR for 2026 (2025: 4.0 MEUR), but based on the weaker-than-expected Q4 and the outlook, we see clear preliminary downward pressure on our forecasts. More robust earnings growth from the company is still pending, as it would require a gradual recovery in market investment activity and price levels.