Tecnotree Q4'25: Takeover bid currently the main driver for the share

Translation: Original published in Finnish on 02/26/2026 at 08:00 am EET

Source: Inderes

Tecnotree's financial statements did not contain any material new information regarding the ongoing tender offer, especially since the guidance for 2026 was already known. In our view, the success of the tender offer particularly depends on Jorma Nieminen and a group of smaller shareholders, and if the 90% threshold is not met, we also see the possibility of the offer being raised. Thus, we recommend that shareholders continue to hold on to their shares, at least for the time being. We reiterate our EUR 5.7 target price and Hold recommendation for Tecnotree.

No major drama in Q4 figures

Tecnotree’s Q4 revenue grew by 11% to 19.5 MEUR, beating our 19.0 ME estimate slightly. For the full-year 2025, revenue grew by 1% and 8% on a comparable basis (headwind from the weakening dollar), reaching the company's guidance. Profitability was strong at the end of the year, as guided, and the company's EBIT was 12.3 MEUR in Q4 (Q4’24: 10.9 MEUR). Earnings were somewhat supported by an exceptional 1.0 MEUR positive materials and services cost. Net profit remained at 4.2 MEUR, burdened by significant one-off items of 6.2 MEUR (a 3.1 MEUR loss provision related to the sale of business operations and a 3.1 MEUR write-down of receivables). We believe that the write-down of receivables indicates that our concerns about the quality of receivables have been justified. Total receivables rose to a new record of 80.9 MEUR, which is as much as 112% of last year's revenue. Free cash flow in Q4 was slightly positive as expected (1.4 MEUR), supported by strong earnings and accounts payable financing, allowing the company to meet its cash flow guidance. The order book remained at roughly the same level as in recent quarters at 107.5 MEUR (2024: 79.6 MEUR).

The guidance for 2026 was already known

Tecnotree already issued guidance for 2026 when the tender offer was announced. The company expects revenue to grow at a low to mid-single-digit percentage in constant currency and full-year free cash flow to exceed 5 MEUR (2025: 4.6 MEUR). We find the growth guidance to be rather soft given the company's record-high order book, and in our view, it indicates that the order book is spread over a very long period (the large South African order announced last year is for seven years). The cash flow guidance also does not indicate a significant improvement over last year (4.6 MEUR), and, thus, cash conversion will remain weak.

We believe it is advisable to hold onto the shares for now

In our view, the financial statements did not reveal significant new information about the takeover bid, especially since the guidance for 2026 was already known. The total price of the offer is 131 MEUR, and considering the convertible bonds exchanged for shares, the enterprise value is around 118 MEUR. Measured by both market cap and enterprise value, the free cash flow yield at the lower end of the 2026 guidance rounds to 4%. We find the cash flow yield quite low considering Tecnotree's risk level and the uncertainty associated with the long-term cash flow outlook, which suggests the offered price is good.

However, we still see the possibility of a raised tender offer, even though Kyösti Kakkonen, who was previously reluctant to accept the offer, has already publicly commented that he supports it. Jorma Nieminen and his companies' holding was 8.3% of the share capital in the flagging notification issued on February 19, and thus we believe that he and a small number of retail investors could prevent the consortium from reaching 90%. Thus, it seems, the fate of the offer is largely in Nieminen's hands, and after the turn of the month, we will once again see how Nieminen's holding has developed. As the offer period is still ongoing, we recommend that shareholders hold on to their shares for the time being, as failure to reach the 90% threshold could lead to an increased offer. On the other hand, extending the offer period is also a possible initial option. The biggest risk is that the offer period would not be extended or the offer would not be raised, which could put pressure on the share.