Sitowise Group operates in the construction and infrastructure sector. The company specializes in the development of large construction projects. Examples of projects that the company carries out include road and building construction, as well as pipe and underground construction. The projects are carried out independently and in collaboration with other players in the industry. The largest operations are found in the Nordic market, where customers are found among corporate customers and public actors.
Sitowise announced on Tuesday that it would recognize an impairment of approximately 40 MEUR relating to its business in Sweden. While this impairment will not affect cash flow, it does reflect the prolonged challenges facing the Swedish business. The risk of a write-down was obvious, so the news came as no surprise and does not pressure us to change our operational estimates immediately.
Sitowise's Q3 earnings report was subdued overall. While Finland performed well, losses in Sweden deepened. During the bottom of the construction cycle, financial expenses consume all cash flow, but earnings can rebound rather quickly as demand recovers. However, we need clearer signs of an earnings turnaround before we can take a bolder view.
Sitowise reported an underwhelming result overall this morning, which also fell slightly short of our low expectations. The company's revenue declined by approximately 3%, and adjusted EBITA also declined slightly from the weak comparison period. Based on the reported results, Infra and Digital Solutions continued to perform well but the trend in Sweden remains clearly downward-pointing. The outlook remained largely unchanged in the various segments, and there was still no significant upturn in the order book. The net debt/EBITDA ratio, reflecting the current weak performance, rose to 7.2x, already a very high figure underscoring the need for successful performance-improvement measures.
Sitowise has appointed Sanna Sormaala as its new CFO, effective January 2026, following the departure of Hanna Masala. In the interim, Kim Strömberg will serve as CFO from October 2025. We view the transition as relatively smooth, with Sormaala’s background expected to support Sitowise’s continued development.
Sitowise’s Q2 results were mixed, with revenue in line with expectations but disappointing profitability. A slow recovery remains the prevailing outlook, as indicated by management commentary and market indicators. Consequently, we continue to view the risk/reward ratio as unattractive, stemming from the combination of weak earnings, high leverage, and persistent market uncertainty. As a result, we reiterate our Reduce recommendation and revise our target price to EUR 2.30 per share (was EUR 2.40 per share).
Sitowise reported disappointing Q2 earnings, with adjusted EBITA below our forecast, despite revenue broadly meeting expectations. The weaker profitability stemmed from challenging market conditions, intense pricing pressure, and low utilization rates. Given the continued high uncertainty in the market, Sitowise did not provide any guidance this quarter either, which we view negatively. We believe a market recovery, crucial for Sitowise's revenue and profitability to rebound, is unlikely before 2026-2027.
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.
Sitowise’s Q1 results were mixed, with revenue in line with expectations but underlying profitability slightly below. In our view, the still weak profitability reflects the criticality of revenue growth, which is also a necessity for strengthening cash flow and thus the financial position. Relative to the low near-term earnings level, the valuation of the stock is elevated, which together with the financial position constitutes a weak risk/reward ratio in our view. Therefore, we reiterate our Reduce recommendation and revise our target price to EUR 2.40 (previously EUR 2.50), mainly due to lower estimates.
Sitowise reported weaker-than-expected Q1 results. The company’s revenue was in line with our expectations, but earnings fell well below our forecast due to weak market conditions, a tight pricing environment, and a low utilization rate.
