Translation: Original published in Finnish on 11/14/2025 at 9:24 am EET.

Source: Inderes & Modular Finance (consensus)

Koskisen's Q3 result published this morning was below our and consensus expectations, although the underperformance was also partly due to non-recurring factors. The report did not indicate any clear signs of recovery in the market situation, but the decline already seen in wood market prices should ease the company's cost pressures somewhat over the winter. Koskisen reiterated its guidance as expected, and we anticipate that the company will achieve it despite Q3's setback. However, Koskisen shares may come under pressure today as the report was lackluster, especially considering the increased expectations following this year's rise in the share price.   

Earnings improvement unexpectedly halted in Q3

Koskisen's revenue grew 24% from a low comparison figure in a seasonally quiet Q3, which was about 5% below our and the consensus estimates. As expected, growth was fully driven by increased volumes and prices in the Sawn Timber Industry, but the growth rate did not rise to the forecasted level. Growth in the Sawn Timber Industry was supported inorganically by Iisveden Metsä, which was included in Koskisen's figures for the first time in Q3 for a full quarter. While the report does not directly reveal the organic growth rate, our preliminary assessment is that growth in the Sawn Timber Industry fell short of our expectations, particularly in terms of organic growth. Revenue in the Panel Industry was broadly in line with the comparison period, as we expected, with the market situation and a slightly extended investment shutdown keeping volumes and average prices fairly stable.

Koskisen's adjusted EBITDA fell approximately 22% in Q3, to 2.9 MEUR, from the comparison period. Earnings development was significantly weaker than our expectations and those of the consensus. The main reason for the earnings miss was the Panel Industry's decline to the break-even point in terms of EBITDA, caused by the negative impact of the aforementioned investment shutdown on volumes and product mix, the high price of birch logs, and a non-recurring write-down of 0.9 MEUR on inventory. The Sawn Timber Industry's earnings accumulation also fell short of estimates due to lower-than-expected revenue but Iisveden Metsä's contribution to the unit's results was likely still minimal as well. The group's cost structure increased and profitability remained challenged by high log prices because, in Q3, the company mainly used wood reserves purchased at higher prices at the beginning of the year than current market prices. Contrary to our expectations, the Other segment's result was slightly positive due to the recognition of negative goodwill related to the acquisition of Iisveden Metsä. Lower down, depreciation and finance costs slightly exceeded our estimates, while taxes were recorded as a positive item. Koskisen's loss at the EPS level deepened in Q3 from the comparison period to EUR 0.07, falling quite short of forecasts, particularly in terms of the operating result. The development in terms of cash flow was slightly better, as cash flow from operating activities remained at approximately the same level as in the comparison period.  

Guidance remained unchanged as expected

Koskisen reiterated its guidance for 2025 according to which revenue will grow from last year (2024: 282 MEUR revenue) and the adjusted EBITDA margin will be 7-11%. The reiteration of the broad guidance was fully expected in our opinion. We expect Koskisen to achieve its guidance without any problems, thanks to a fairly good H1, the acquisition of Iisveden Metsä, growth and efficiency gains from investments, and a likely decline in raw material prices during Q4. However, the market situation does not appear to be providing any rapid relief, as the company commented that the upturn in demand is sluggish and uncertain because consumers, who indirectly drive demand, remain very cautious for various reasons and construction activity is slow in all of the company's market areas.