Componenta Q4'25 preview: Expecting positive seal for turnaround year

Translation: Original published in Finnish on 3/3/2026 at 8:47 am EET.

Componenta will publish its 2025 financial statements release on Friday, March 6, 2026. We expect Q4’25 revenue and EBIT, adjusted for large non-recurring items, to have improved, which would seal the significant turnaround in the earnings level achieved in the past financial year. We expect the company to guide for growth in revenue and EBITDA, but we slightly lowered our estimates as the agricultural machinery market continues to develop more subdued than we expected. The estimate cut, combined with a slight increase in the share price, makes the risk/reward ratio less attractive than before. Considering this, we reiterate our EUR 4.7 target price but lower our recommendation to Reduce (was Accumulate).

We predict a return to dividend payments after a long break

Componenta entered Q4’25 with an order book of 18 MEUR, 30% higher than the comparison period, supported by M&As. We expect the revenue growth percentage to remain low (7%) in relation to this, as the comparison period's revenue, unlike the order book, accounts for completed M&A transactions. We expect Componenta's adjusted EBITDA to have come in at 2.5 MEUR in Q4, corresponding to an EBITDA margin of ~8.6%. Our forecast represents an improvement of just under 2% in the adjusted EBITDA margin, which would roughly correspond to the profitability level achieved in H1'25. The announced non-cash-flow-affecting non-recurring item raises our 2025 EPS estimate to as high as EUR 0.78. Thus, within the framework of the dividend policy (1/3 of earnings), the company could distribute a substantial dividend. However, we expect the company to distribute a dividend based on EPS adjusted for the non-recurring item, which in our forecast corresponds to EUR 0.07 per share.

We expect earnings to continue on a positive trend

We expect Componenta to guide for growing revenue and adjusted EBITDA for the financial year 2026. The fiscal year 2025 sets a rather high bar for improvement, as the profitability achieved in Q3'25, in particular, was excellent compared to historical levels. On the other hand, the outlook for Componenta's significant Machine Building segment (34% of revenue in H1'25) is slightly upward for the current year, and we expect the upward trend in the Defense Equipment and Energy to continue. In our forecast, the Agricultural Machinery and Forest Machinery segments continue to constrain revenue due to subdued production volumes and profitability through production utilization rates. However, in the medium term, a significant improvement in the volume of the Agricultural Machinery segment, in particular, creates conditions for achieving earnings growth. The volume development of the agricultural machinery market has fallen short of our forecasts on several occasions, which, in our opinion, has increased the risks related to the timing and realization of the recovery. We do not expect the Agricultural Machinery segment to reach the revenue levels of the peak years 2022–2023, but we do expect revenue to grow significantly from the current low level in the coming years (the Agricultural Machinery segment's revenue in H1'25 was ~45% lower than in H1'23).

Valuation appropriately incorporates earnings growth expectations

After adjusting for the amount of factoring financing, which corresponds to interest-bearing debt, the EV/EBITDA multiples are 5.6x and 4.7x for 2025 and 2026, respectively, and the corresponding EV/EBIT multiples are 13x and 10x. P/E multiples that account for high financing expenses are at 22x and 13x. The DCF model yields a value of EUR 4.7. There is upside in the multiples only in 2027. The recent slight share price increase (~7%) and the weaker-than-expected performance of the Agricultural Machinery segment make the risk/reward ratio less attractive than before. Thus, we reiterate our EUR 4.7 target price but lower our recommendation to Reduce (was Accumulate).