Translation: Original published in Finnish on 10/30/2025 at 9:39 am EET.

Source: Inderes

GRK published a stronger Q3 result than we expected, with both revenue and profitability developing more favorably than anticipated. In our view, this overperformance was mainly due to projects progressing quickly as the order book shrank more than projected. The demand outlook appears healthy, however, and the company has a substantial number of won projects outside its order book. The company did not comment much on the financial situation of Stegra, its largest customer of recent times, but the matter is listed as a risk factor in the Q3 report. 

Revenue and result once again exceeded our estimates

GRK's revenue grew by 15% to 257 MEUR, as the company continued the swift execution of its strong order book during Q3. Revenue was notably higher than we anticipated, particularly in Finland, where projects advanced swiftly.

GRK's adjusted EBIT was flat year-on-year in Q3 despite a clear increase in revenue. However, the achieved margin of 9.1% is excellent, and there is no reason to be alarmed by the decline from the comparison period's robust level of over 10%. The margin decline was also in our forecasts, and the operating result clearly surpassed them thanks to strong growth. In terms of profitability, it is also worth noting that Q3 is typically the seasonally strongest quarter for GRK. Earnings accumulation and profitability in Q3 were especially supported by the high revenue level, but based on the margin, projects have continued to proceed without major problems. In our view, profitability development, driven by revenue growth, has been favorable in all the company's operating countries, even though the report does not disclose country-specific profitabilities.

Financing expenses were again positive, thanks to, among other things, interest income from a strong cash position, while the tax rate was slightly lower than the usual level. Thus, GRK's Q3 EPS of EUR 0.47 exceeded our forecast by an even greater margin than EBIT.

Working capital also developed favorably in Q3, resulting in cash flow that clearly exceeded accumulated earnings. Due to the nature of GRK's project business, significant seasonal cash flow fluctuations are typical, and the development of earnings and cash flow can be significantly divergent on a quarterly basis. Typically, working capital levels decline from their summer peaks toward Q1.

Sales were moderate

According to our calculations, GRK received new orders of around 150 MEUR in Q3, corresponding to an order-to-billing ratio of 0.6x, similar to the previous quarter. GRK's order book stood at 683 MEUR at the end of Q3, which was 5% below the comparison period. The order intake was roughly in line with our expectations, but the faster-than-estimated delivery of existing order book items decreased the order book at the end of Q3 below our expectations. Overall, we consider the order intake in Q3 to be quite good, as no major projects fell within this period.

The company commented positively on the demand situation in all regions, and in addition to ongoing tenders, it has over 490–560 MEUR of projects already won but still in the development phase outside its order book. The Q3 order book also does not include the 78 MEUR projects won in October. Consequently, we believe the company's order outlook appears healthy, although intensified competition, as highlighted by the company, may moderate the margins of new projects.

Guidance indicates a quieter end to the year

GRK reiterated its recently updated guidance, according to which its revenue is 820-870 MEUR and adjusted EBIT is 57-64 MEUR in 2025. This was fully expected after the company raised its guidance only a few weeks ago. At the same time, it should be noted that, after a strong Q3, reaching the upper end of the ranges would require a year-on-year decrease in earnings and revenue in Q4. In the earnings report, the company noted that several significant projects were completed more rapidly than anticipated in Q3, suggesting that this year's earnings will be more heavily weighted toward the summer months than usual. Meanwhile, the faster-than-expected implementation indicates that project management is performing exceptionally well, which bodes well for the share's overall outlook.