Sitowise Q2’25 preview: No clear signs of a sharp recovery

Sitowise will report its Q2 results on Wednesday, August 13. We expect a slight revenue decline due to challenging market conditions and one fewer working day. While this decrease is anticipated to negatively impact earnings, operational adjustments implemented to address the current environment should provide some support for profitability. In the Q2 report, we will be closely monitoring comments regarding the market outlook, cash flow development, and the financial situation, which remains a key focus this year.

Source: Inderes

Another challenging quarter

We expect Sitowise’s revenue to decline slightly by around 3% in Q2 to 49.3 MEUR (Q2’24: 50.9 MEUR). This decline is primarily attributed to the prevailing challenging market conditions in the Buildings business and in Sweden, exacerbated by one fewer working day. Within the Buildings business, we anticipate that the ongoing weak construction market, characterized by generally low tendering volumes, will continue to show as overcapacity and intense price competition. In Sweden, the local construction market remains sluggish, impacting the demand for structural engineering services. We estimate that the Infra and Digital Solutions business areas will outperform the rest of the group, owing to more stable demand, especially for services related to the green transition, digitalization, and security.

Significant profitability improvement requires sales growth

We expect Sitowise’s adjusted EBITA to increase somewhat from weak comparison figures last year to 3.0 MEUR, with the margin reaching 6.1% (Q2’24: 5.0%). Despite a slight decrease in revenue, we anticipate that savings from restructuring efforts will support profitability during the quarter. However, significant improvement in profitability hinges on sales growth. Additionally, we expect that the continued tight pricing environment and low utilization rates will negatively impact profitability.

We anticipate that Sitowise’s high financing expenses will erode profitability in the lower lines of the income statement. However, due to somewhat better operational profitability compared to last year, we forecast a slight increase in EPS.

Focus remains on outlook and financial situation

In Sitowise’s upcoming report, we will closely watch for any comments about the timeframe for market recovery and the turnaround for the Swedish business. According to our estimates, the residential construction market remained weak in both Finland and Sweden in Q2, and there are currently no signs of a recovery. We expect Sitowise's revenue to decline by 1% this year but anticipate a return to organic growth in H2’25, driven by a gradually improving market, a stronger order book, and higher utilization rates. In 2026, we forecast growth to accelerate to 9% as construction and investment activity picks up and price competition eases.

In addition to the outlook, our attention is focused on Sitowise’s cash flow and financial situation. Sitowise carries a very high debt leverage (net debt/adjusted EBITDA), which stood at 6x in Q1’25 (target below 2.5x), clearly exceeding the target level.