Sitowise Q3'25 preview: Sweden continues to drag down earnings

Translation: Original published in Finnish on 11/4/2025 at 7:55 am EET.

Source: Inderes

Sitowise will announce its Q3 results on Thursday. We expect overall revenue to be close to the level of the comparison period, with growth in infrastructure and digital services, but decreased sales in the Buildings business and in Sweden. We also expect that profitability, adjusted for one-time items, will have weakened slightly, weighed down by Sweden. After a weak start to the year, the focus will be on order book development and the outlook for the future. We do not expect the elevated net debt/EBITDA ratio (Q2: 5,9x) to have improved yet, as this would require an improvement in earnings.

Sweden and Buildings segments continue to face pressure

We expect Sitowise's revenue to have declined by 0.7% to 41.5 MEUR, as the order book reported at the end of the last quarter (148 MEUR) had not yet started to pick up but was down from a year ago (162 MEUR). However, demand continues to vary greatly between different segments, as the order books for Infra and Digital Solutions were at a good level, and we expect revenue growth from both. The organic growth of Digital Solutions continues to outpace the overall IT services market, driven particularly by strong sales in the product business.  Order books and workloads in the Buildings and Sweden segments remained low, and we expect sales to have declined further in Q3. The number of working days is the same as in the comparison period, so it does not affect comparability at this time. We do not expect any major changes in the important utilization rate compared to the previous quarter (Q2: 74.2%).

Sweden’s losses weigh on the result

We forecast that adjusted EBITA in Q3 will decrease slightly to 2.1 MEUR (Q3'24: 2.4 MEUR). In our forecast, infrastructure continues to generate strong profitability (over 12%), and the digital business is also close to reaching this target level for the group. The Buildings segment has turned a slight profit compared to a loss during the comparison period. However, our forecast still shows Sweden firmly in the red. We expect the continued tight pricing environment and persistently lower-than-normal utilization rates to negatively impact profitability, particularly in Sweden, and the previously implemented cost savings in the segment will not be sufficient to offset this development.

Uncertainty surrounds order book development

The company has not issued guidance for the current year, but it has commented on the outlook for the next 12 months across different segments. At the end of the last quarter, the outlook for infrastructure was described as stable. The outlook for Digital Solutions was stable and improving. The outlooks for the Buildings and Sweden were weak but improving. We expect the outlook formulation to remain unchanged as we do not believe there have been any significant market changes.

However, the number of new orders will need to gradually start rising for our growth expectations for 2026 (+6%) to be considered realistic. While we predict that the order book will have increased from the Q2 level (148 MEUR), there is uncertainty associated with this, particularly with regard to the Sweden business, where no significant new orders have been announced. In its investor letter published prior to the quiet period, the company also stated that, all in all, growing order book significantly in the current market environment is challenging. During the quarter, the company has announced that it won the contract with Sweco to update the Lohja-Salo railway plan, which will support Infra's order book. Larger, multi-year projects related to Digital Solutions were also won from the Finnish Transport Agency (2.7 MEUR) and Trafikverket (4 MEUR). In the Buildings business, the company was selected to design the building technology for a new hot hospital to be built in Pori (1 MEUR).