Componenta Q3'25 preview: Ingredients for a sound financial year

Translation: Original published in Finnish on 10/27/2025 at 6:20 am EET.

Componenta will publish its Q3 report on Thursday, October 30, at 8:00 am EET. We expect seasonally weak Q3 revenue and profitability to improve with the help of business acquisitions. The order book is also expected to remain in organic growth as the comparison figures are weak. Although we have revised our earnings estimates slightly upwards for the rest of the year, we still estimate the share to be fully priced. We reiterate our Reduce recommendation and EUR 4.3 target price.

We expect order book to have remained in clear growth

Componenta entered the seasonally quiet Q3 with an order book of 14.2 MEUR, up 31% year-on-year. The growth of the order book was supported, in particular, by business acquisitions carried out at the end of 2024, as well as by organic growth in the order book, which, according to our estimates, reached a good level. We expect Q3 revenue to have grown by nearly 30%, supported by a robust order book. We expect EBITDA to strengthen to 1.4 MEUR. However, we expect the EBITDA margin to weaken as the bar set by the comparison period is quite high, in our estimation, and the higher price of electricity in Finland than in the comparison period will weigh slightly on profitability. We expect EBIT to remain at zero in Q3, with the lower lines expected to turn negative after financial expenses. We expect the two-month order book to have grown by 28% in Q3 to 18 MEUR. We expect the order book's organic growth to have remained brisk at 10%, as we anticipate contributions from the majority of customer segments to order intake.

Our earnings growth expectations are based on clear underlying factors

Componenta guides for an improvement in both revenue and adjusted EBITDA from the previous financial year. Componenta's EBITDA generated in H1'25 exceeds the EBITDA for the entire previous financial year, and revenue for the current financial year will be significantly supported by the completed business acquisitions. Considering the solid order book at the end of H1 in particular, we are already certain that the guidance will be met. We forecast revenue of 115 MEUR and EBITDA of 8.8 MEUR (margin of 7.7%) for 2025.

We expect Componenta's earnings growth to be supported by both revenue growth and improved relative profitability in the coming years. In terms of customer segments, our revenue growth forecast is driven by the defence equipment industry and agricultural machinery. Componenta has announced major multi-year contracts in the defence equipment industry, and we expect a turnaround from the deep downturn in agricultural machinery to support sales starting next year. We also expect these factors to boost profitability because we estimate that margins on defence equipment industry orders exceed Componenta's average, and increased demand for agricultural machinery components will boost Componenta's foundries' utilization rates, which is important for production efficiency. We expect earnings growth to be supported by a decline in financial expenses in the coming years, as we believe there is room to reduce the current high financial expenses through financing restructuring. These factors will cause the net result in our estimates to quadruple from its low level during the years 2025–2028.

Earnings growth priced into the share

The EV-based multiples that take net debt into account are at a neutral level overall for 2025 and 2026 (EV/EBITDA 5x–4x, EV/EBIT 14x–8x). Our EV-based multiples do not account for the use of factoring financing, which would significantly increase the multiples. Therefore, in our analysis, we emphasize the P/E ratio, which is high based on current financial year estimates and neutral based on next year's estimates. On a balance sheet basis, the valuation is high compared to recent share history (2025e P/B 1.5x). Our DCF model yields a value of EUR 4.4.