Nurminen Logistics CMD: Intra-European railway business as a medium-term growth driver

Translation: Original published in Finnish on 5/20/2026 at 9:28 am EEST.

Nurminen Logistics hosted a Capital Markets Day (CMD) in Stockholm yesterday, and a recording of the event is available here. During the day, the company shed light particularly on the strategy, market drivers, and growth opportunities and targets of its international Railway business. However, the company did not revise its financial targets at the group level. Our main observations regarding the presentations were as follows:

Growth opportunities in the intra-European market

According to Nurminen, the total value of trade between countries on its current targeted intra-European routes (trade between Sweden and Italy, and Sweden and Spain) is estimated at 7–10 BEUR annually, with less than 5% of this transported by rail. The company therefore identified significant potential to increase the share of rail transport, especially for long-distance travel (over 1,000 km), driven by speed, competitive pricing, and environmental friendliness (including regulatory factors). According to the company, railways in Europe have largely been used to transport bulk goods (such as minerals), whereas Nurminen sees opportunities to shift consumer goods and other general cargo to rail transport. The company viewed its rail-based multimodal expertise as a key competitive advantage in this market, particularly for higher-value and time-critical cargo, as well as more complex shipments. At the same time, the company stated that it did not see any factors setting it apart in the transportation of bulk goods. Overall, we believe these themes were strongly aligned with the company’s previously communicated roadmap. We thus view the company’s strategic positioning positively and also see clear growth drivers in the share of rail transport, supported by regulation as well. Nevertheless, we believe the biggest uncertainties and risks are whether rail transport will ultimately succeed in gaining market share from more traditional modes of transport and, conversely, how successful Nurminen itself will be in acquiring new customers, which may take time, especially when opening new routes. However, we do not believe the overall market size alone will limit Nurminen’s growth potential for a long time to come.

Strong growth sought from international Railway business

In connection with the CMD, the company did not adjust its group-level targets for 2025–2027 (e.g., 10% average annual revenue growth and an EBITA margin above 13%). Instead, it announced its intention to double revenue from its international Railway business within 2–3 years. Based on Nurminen's more detailed breakdown of current business revenue, the international Railway business currently accounts for 22% of the group's revenue, excluding intercompany eliminations. Relating this to the LTM or 2025 revenue, we estimate the company is aiming for absolute growth of at least around 20–25 MEUR in this business. At the same time, the margin target set by the company for this business is in line with the group-level target. In our view, these targets and yesterday's presentations indicate a strong current focus on growing the international Railway business. Simultaneously, we believe that they also indicate that achieving similar growth in other, more mature Railway businesses (North Rail, Finnish terminal and forwarding services) will be nearly impossible except at the expense of profitability.

To achieve its growth target, the company is planning to add a second block train service between Italy and Sweden after the summer holiday period, following the successful ramp-up of operations. Afterwards, the company intends to establish a direct connection between Spain and Sweden by late 2026 or early 2027. According to the company, the revenue potential of a single route service is clearly over 10 MEUR per year in the long term, which reflects the organic growth potential. However, this requires a full load factor in both directions, which we believe is more challenging for north-to-south shipments (cf. the same challenge previously faced on the Northern Corridor from Europe to China). The company claims that it can make a single route profitable in about six months, but we estimate that new routes, particularly those targeting new markets, will take more than a year to even come close to reaching their full potential.

Based on the commentary, the company is pursuing growth primarily through organic means, although selective M&A is part of its growth strategy. Thanks to the company’s capital-light business model, which relies on a strong network of partners, this approach does not require significant investments and can be scaled up fairly quickly for new routes or additional departures. Conversely, however, launching a new route requires investment in sales and marketing, and it also significantly increases working capital requirements during the initial ramp-up phase of the route. Thus, organic growth will require capital, but we estimate that the route-specific working capital commitment will gradually decrease as volumes increase and stabilize. On the other hand, initial capital requirements also raise the barrier to market entry. In line with the company's business model, we consider customer acquisition and the partner network, as well as their successful expansion into new markets, critical success factors for the company.

Significant but uncertain opportunities in longer term

According to the company, its customer base currently consists of over 1,000 customers, 80% of whom are based outside of Finland. Thus, the company's customer base can be considered quite broad at present. Based on the customer distribution presented by the company, its top 30 customers are also diversified across several industries, which decreases dependence on the business cycles of individual industries or customers. However, we estimate that the share of certain customers remains quite significant (cf. the largest customer accounted for 12% of the group's revenue in 2025). The company also noted that the customer base of North Rail, its current earnings driver, is concentrated. Therefore, in our view, a broad customer base does not in itself completely rule out customer risks, even though the likelihood of such risks is low. However, if they were to materialize (geopolitical risks), their impact would be extremely significant.

Nevertheless, an expanded customer base, Nurminen's increased service offerings, and geographical coverage will offer significant opportunities as the geopolitical situation normalizes. The company estimates that potential turnaround opportunities related to this include, in particular, the restoration of the direct Northern Corridor, which generated over 40 MEUR in revenue when the route closed. On the other hand, based on the measures it has taken, the company sees the combined market potential of China and the growing European market as an opportunity worth over 100 MEUR. As we have stated before, we find that investors largely receive this option as a bonus at present. However, in our opinion, it is difficult to rely on the normalization of the operating environment in the medium term due to the geopolitical situation, and even in the longer term, we see uncertainty associated with the route's recovery. The company itself does not rely on this in its current growth measures but emphasized that it has maintained the ability to quickly reopen the Northern Corridor if the situation allows and demand recovers.

Capital allocation also received attention

Nurminen also disclosed its capital allocation at the CMD, although the company did not specify the exact breakdown. However, it seems that the company’s primary focus is currently on organic growth. In addition, the company views inorganic growth as an opportunity as made possible by its strong cash flow and stable financial position (cf. Q1’26 net debt/LTM EBITDA of 1.1x). Nevertheless, it noted that it will not make acquisitions solely for growth's sake, a stance we consider sensible. The company also commented that it currently wants to further improve its market understanding, which is why we estimate that potential larger complementary acquisitions will likely only occur in the medium term. The company aims to maintain a strong financial position as well. Taking the overall picture into account, we believe the company will, in principle, be able to maintain its profit distribution at least at a stable level, despite certain organic investments (incl. working capital) or minor acquisitions. Regarding profit distribution, the company noted that a share buyback is also an option, which we view positively, given the current share valuation.