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Sitowise Group Oyj reported a mixed Q3 2025 performance, with a notable increase in order intake but a decline in net sales. Despite the challenges, the company remains optimistic about its future, aiming to double its digital business by 2030. The stock price fell 2.4% to €2.44 following the announcement, reflecting investor concerns over declining sales and profitability.
Key Takeaways
- Order intake rose by 22.3% year-on-year to €41.7 million.
- Group net sales declined by 3% year-on-year.
- Stock price decreased by 2.4% after earnings release.
- Sitowise aims to double its digital business by 2030.
Company Performance
Sitowise’s overall performance in Q3 2025 showed a decline in group net sales by 3% compared to the same period last year. The company’s adjusted EBITDA margin was recorded at 4.2%. Despite the decline in sales, Sitowise’s order intake increased significantly by 22.3% year-on-year, reaching €41.7 million. The order book also saw a slight increase to €149 million, indicating strong future demand.
Financial Highlights
- Revenue: Not specified in euro terms, but net sales declined by 3% YoY.
- Adjusted EBITDA margin: 4.2%
- Order intake: €41.7 million, up 22.3% YoY
- Order book: €149 million, slight increase
Market Reaction
Sitowise’s stock price fell by 2.4% to €2.44 following the earnings announcement. This decline reflects investor concerns over the company’s declining sales and profitability, despite the positive growth in order intake. The stock remains within its 52-week range, with a low of €2.10 and a high of €3.05.
Outlook & Guidance
Looking forward, Sitowise expects the market to remain mixed but stable. The company is targeting growth in sustainability, energy, industry, and security sectors. Sitowise aims to double its digital business by 2030 and anticipates a recovery in the buildings market by 2027. The company is also focusing on a turnaround in its Swedish operations.
Executive Commentary
Heikki Haasmaa, CEO of Sitowise, expressed confidence in the company’s strategic direction, stating, "We are now better positioned for a turnaround in Sweden in 2026." He also emphasized the company’s ambitious goal to double its digital business by 2030, noting, "Our goal is ambitious. We want to overall double our Digi business by the end of 2030."
Risks and Challenges
- Declining sales and profitability could impact future growth.
- Market conditions remain mixed, with potential delays in the residential segment recovery.
- Operational challenges in the Swedish market require attention.
- Macroeconomic factors and industry competition could pressure margins.
Q&A
During the earnings call, analysts inquired about Sitowise’s confidence in the Swedish business turnaround. The company highlighted its strategic initiatives and cost efficiency measures as key factors driving the expected improvement. Analysts also questioned the growth strategy for the product business, to which Sitowise confirmed a focus on expanding its digital solutions and infrastructure projects.
Full transcript - Sitowise Group Oyj (SITOWS) Q3 2025:
Mari Reponen, Head of Investor Relations, Sitowise: Welcome all, and thank you for joining Sitowise’s Q3 Results Webcast. My name is Mari Reponen. I’m Head of Investor Relations here at Sitowise. Today I have here with me our CEO, Heikki Haasmaa, and Interim CFO, Kim Strömberg. They will begin shortly the presentation on our Q3 results, followed by outlook and growth priorities. As usual, you can submit questions via the chat below the presentation. Please include your full name when presenting those. Heikki and Kim will address those during the Q&A session after the presentations. I turn it over to Heikki and Kim now.
Heikki Haasmaa, CEO, Sitowise: Thank you, Mari. Welcome everyone on my behalf as well. Let’s start with the key highlights for the third quarter. Firstly, I’m very pleased with the continued strong performance of our infra and also digital solution business. Both businesses delivered above target level profitability despite the mixed parts’ challenging market conditions. In the digi part, one of the key drivers behind the strong performance was the increasing share of our software service business. It grew by 15% year on year and represented approximately one third of Digi’s net sales during the quarter. A third event worth highlighting is the improving performance in our structural engineering business, both in Sweden and Finland. This has been the area of challenge for us some quarters, but now we are clearly seeing that we are on the right track with this discipline in both of our countries.
This is, of course, very promising. The buildings business has actually also undergone a clear shift during this year, thanks to the all-adjustment measures that we have been implementing earlier in this year. There is also a broad set of actions that have been implemented for Sweden, and I’ll elaborate on that a bit further. Overall, we also saw a clear improvement in the utilization rate for the whole group, and that is, of course, very important. As a final element, and an important one, the order intake was a very good one for the third quarter, showing clear improvement compared to last year’s third quarter. The order book also increased from the second quarter level. Really happy about these achievements. The key figures, still in brief: the group net sales declined by 3%. Adjusted EBITDA margin was 4.2%.
Heavily impacted by our business in Sweden. In other words, I really want to highlight that our Finnish operations performed very well. I will come back to that one also together with Kim a bit later on. Overall, we feel that we are now better positioned for a turnaround in Sweden in 2026. A lot of achievements in that area. Operating profit for the third quarter was better than last year. There are some seasonal factors such as summer holidays and also the low profitability affected cash flow and leverage. Overall, our financial position remains solid and we will also cover this part in more detail. As I said already, order intake, a very good one for the third quarter. We will move on to the business area, starting with the infra. First, a major win, which we are very happy about.
During the quarter, we won Lohja-Salo railway plan together with Sweco. This project is part of the West Rail project and highlights again our infra team’s high expertise in this kind of rail project. This is really great news. Looking at numbers, net sales in infra grew by a bit over 4%. Now infra actually already represents 39% of the whole group net sales. The growth was very much driven by green transition and also industrial projects and the rail project that we won also earlier last year. After several also a bit quieter quarters, the level of state investments seem to be gradually also improving with multiple mid-sized road design tenders presently underway. Looking ahead, we expect the market still to remain mixed with modest public sector budgets in traditional infra spending also next year. However, then.
There are several growth drivers for us. Again, green transition, environmental services, defense, security-related services, and we expect them to stay strong. Overall, the infra order book remained at a healthy level during the third quarter as well. When we look at the fourth quarter, this same applies naturally to all of our business areas, so we have there one working day more compared to last year. However, we expect that the positive impact might be a bit subdued as we actually have one day less in November and two days more in December. Now the Christmas timing is a bit challenging from the work point of view. Moving on to buildings, starting again with the major win as well. We were selected to design the building technology for a so-called hot hospital or acute care hospital to be built in Pori.
The value of the design project is roughly EUR 1 million, and the new four-store hospital is scheduled to be completed in 2029. Overall, we see that our solid experience in building technology for this kind of hospital projects and our strong references from the past played a key role for us winning this project. Very proud of the team with this win. Looking more to the substance, buildings net sales declined almost 8% and now represents 28% of the group sales. At the same time, the drop actually in the full-time employees year on year was 14%. Compared to that one, we are satisfied with the net sales performance. Still, what we see is that the overcapacity of resources in the market is quite high, and that also leads to intense price competition overall. Of course, where we focus is on further.
Active sales work and then further improving the utilization. Of course, that we have. Mastering our core processes, meaning how we manage the projects. Overall, I’m pleased with the progress what we’ve done during the last quarter, but also during the whole year. Thus, we are now having a third quarter in a row. A very promising result and seeing that the direction is very good for the buildings business as well. Still commenting about the outlook for the market, we see that the residential segment recovery still will be further delayed, so we cannot rely on that one. However, we see that there are a lot of opportunities in the other business or customer segments, namely industry, defense, security, also energy, and data centers. We continue to focus on those ones.
That also then builds a good picture about the medium and long-term view of our business. We see that that will be a bright one. Moving to digital solutions. In Digi, we clearly strengthened our position as a leading service provider for the critical traffic infrastructure and won two major contracts. A three-year agreement worth EUR 2.7 million to serve as an expert supplier for the Finnish transport infrastructure agency, Raide Railway Information System. And then over EUR 4 million contract awarded to Infra Control, which is our subsidiary in Sweden, for the Swedish transport administration, Trafikverket, for the operation, maintenance, and further development of the national lightning control and monitoring system. Great wins for Digi. Overall, coming back to the key figures, digital solutions delivered again a very strong performance overall.
Especially also compared to the relevant IT sector peers and also the quite tough market what we are still having there. Net sales grew slightly from last year. What is really the highlight here is that our product business continued to grow really well with like a 15% increase compared to last year. Now this product business already accounts for one third of the Digi net sales. Profitability, as said, exceeded our target level for the third quarter. Of course, we are really happy about this one. It was especially driven by this strong performance in the product business. What comes to the market and outlook, we see that still the market is quite mixed and partially challenging as well. There has been postponement of some public sector investments and also pretty strong price competition in the public sector.
Private sector demand has been quite cautious and might remain a bit like that, especially in the forest industry, which is important for us. Overall, taking into account all of this, the quarter was a very strong one for us. The order book is now at a very good level. That is of course very promising for the future. Naturally, I am now thinking about the way forward, so we continue to heavily focus on the product business and also to a certain extent to new geographies. That is also helping us to even have a wider addressable market in the future. Sweden. The picture here is from a project in Marjavik, Stockholm, where Sitowise is responsible for the design and planning of all piping and technical installations for the redevelopment of property in Marjavik 30.
The work includes creating system designs for HVAC and other building systems. This is a great win also for us and now strengthening our order book in Sweden. Coming to the key figures, net sales fell by almost 20%. Now the Sweden business contributes to 12% of the group sales during the third quarter. Of course, now our focus is really much on sales and thus securing the workload for our people. What I already highlighted in the beginning was that I’m especially pleased with the improvement we have had in the structural engineering team there. The utilization rate has been improving and we are really well positioned there for the future. Where we now have most of our focus is the building engineering system, the second biggest discipline in our Swedish business, where we need to further.
Improve our order book. Overall, the business is still loss-making, but we see that now we really laid the groundwork for the improvement in 2026. Also, what is supporting this one is that there is increased tender activity, also the order intake, strong order book, and now also seeing that this is seen in the utilization rate. Of course, all these are key indicators also then for the future. I would like to hand over to Kim, so if you’d just like to briefly present yourself and then let’s go to the group figures. Thanks, Heikki. Happy to be here today. I’ve been working with Sitowise now for a year and a half, leading the business controlling function, and now then having the pleasure of acting as the Interim CFO until Sanna Sormala is joining us in the beginning of January. Great that you’re here.
Glad to be. If we dive into the numbers, our order intake showed a healthy growth in Q3, being up by 3.2% from the previous quarter and 22.3% year on year. All in all, order intake totaled at EUR 41.7 million, and it was driven by significant wins in digital solutions, as Heikki mentioned, and supported by order intakes in infra, buildings, and Sweden. The order book, on the other hand, increased slightly quarter on quarter to EUR 149 million. Overall, Q3 order intake and rising tender activity give us confidence, even as the order book needs further strengthening to support future growth. As mentioned, we keep our focus on active sales in all business areas. On group level, our net sales declined by 3% in Q3 year on year.
As already discussed, our Finnish operations performed very well and in line with our top peers, supported by strong infra and digital solutions growth and continuous improvement in buildings. Sweden, on the other hand, continues to weigh on group results, like Heikki already mentioned, and it is actually more than halving the group profitability. This quarter, in all business areas, positive contributions came from improved utilization, project management, and cost efficiency actions, while prolonged weak market conditions and fierce price competition remain challenges. On this slide, the first graph illustrates our headcount and FTE development, reflecting operational capacity. FTEs declined year on year, mainly due to fewer full-time employees in Sweden and the buildings business. In contrast, digital solutions and infra saw an upward trend, supporting over 5% organic growth in these businesses in January to September.
In Q3, net sales declined less than FTEs, which is then indicating a stronger sales per employee and growth in the product business also. The second graph shows the utilization rate, which tells about our ability to use the available hours in projects. On group level, utilization improved slightly from the comparison period. The improvement gains in Finland, especially in Digi and parts of building business, were unfortunately offset by Sweden, which, despite its improving trend, lowered the group rate by about 1% each point. Improving the utilization remains a key focus item across all the business areas. Similarly to the previous quarters, our liquidity remained good in the third quarter. Due to seasonalities, meaning that the holiday period usually indicates lower invoicing, while salaries and other costs are running normally, the Q3 is typically having a low cash flow.
This year reflects a typical Q3 cash flow level, whereas last year we saw actually a higher invoicing due to the VAT changes implemented by the Finnish government in the beginning of September. Naturally, the weaker profitability also caused pressure on the cash flow. Therefore, the cash flow from the operating activities before financial items and taxes was negative. The leverage was up, as the rolling 12-month EBITDA weakened somewhat. Pushing leverage down is one more reason for us to put full focus and all of our aim into improving profitability in the future. As a reminder, our financing facility was extended in March this year, and we continued with our two relationship banks. The extension was for 15 months from the previous maturity, i.e., the package is now valid until summer of 2027.
Lastly, this slide pretty much summarizes our key financial and other metrics, and I think we have more or less covered all of these points already. Heading back to Heikki. Thank you, Kim. Well done. Thank you. As a reminder, this slide you’ll see soon shows how our business mix has been changing over the past year. I already highlighted a bit about the key figures about the net sales. What is the part of a different business area there? Of course, the key point here is that the well-performing businesses are further growing, and that’s the goal here. This is also like a change, which is driven by our own actions and also our decision to focus on areas of sustainability, energy, industry, defense, security, and then also the product.
But also about the market dynamics, especially the weak construction markets in Finland and Sweden. That is burdening the share of businesses, like a buildings business, and then also our business in Sweden, which is mostly about buildings-related business. As we have been showing it earlier, also this then summarizes the percentage of sales of each business area. I already went through that one. Looking at the market, we overall expect the market in infra and digit to remain mixed but stable. What comes to buildings and business and Sweden business, we expect still them to remain weak. When we look at the next 12 months, we see that they will be improving from the existing low levels. Looking at the profitability, already shared that one. Infra and also now digit being above that 12%.
Target level what we have for the different businesses. Buildings. Below target, and then Sweden. Clearly negative. That is of course the area of focus for us now going forward. If we still a bit further elaborate on the outlook, when we look overall at the technical consulting market, we expect that to be quite mixed, but there continues to be very good demand for the green transition, security, defense, and also overall on the digitalization of the business environment. That will be supporting, or these will be supporting especially the infra and digital solution business areas. In the buildings business area, there have been signs of moderate recovery, still like, further saying that the market, we have seen the bottom of the market. We are seeing that, okay, there is a recovery, but it is probably quite still slow. Like.
Materialize then on a larger scale only in 2027. In what comes to the business in Sweden, we see that it’s quite similar to what I just said for the buildings, especially as a majority of our business there in Sweden is related to more like a buildings type of business area. Of course, we see that in Sweden we have like businesses like infra and project management services where we continue to focus, and there the demand is overall much better. This is a familiar slide then summarizing where our focus is. Firstly, we really want to capture the growth from the growth spearheads. Sustainability, energy industry, security, and also the product business. We’ve been now succeeding with the turnaround in buildings and positioned us for a turnaround in Sweden for next year as well.
That of course continues to be the high priority item for us. Of course we also seek for the further efficiencies, especially with the help of the AI and also computational design. Naturally the basic processes have to be well in control and those we are naturally monitoring on a daily basis. All this then leading to better profitability and also cash flow position. Of course, as you saw during the presentation, we are then diversifying our offering. I think we are actually ready for questions. Mari, welcome back. Yes, thank you. Let’s start with Sweden. That’s of course an interesting topic. Can you comment on how large the negative effect from Sweden was to the whole group in EUR?
Unfortunately, I’m not able to disclose that information, but that’s basically something that at least the ballpark can be quite easily calculated based on what we already shared. What makes you so confident that you can turn around the business in Sweden? Actually, firstly, the team in Sweden has been doing very good work. Of course, the situation has been a challenging one, it’s for sure. Several now also leading indicators are showing that we are on the right track. Maybe starting with the most important, which is the order intake, and then also the order book. We see there is like a continuous improvement. That will be of course a key element. Naturally, like a result of this one is that we are then able to improve the utilization rate. Also there we are already seeing now.
An increase from the levels where we have been. That is really promising. Maybe I will still highlight also this. Structural engineering, that was our biggest concern a couple of quarters ago. There we have already clearly made that turnaround. Now we just need to also apply the same kind of good focus on the building engineering systems. Okay, thank you. You mentioned about the Finnish business that its profitability is at the level of the peers. What is your analysis of the market more generally? Are you losing market share to peers? It seems that at least Sweco seems to be growing faster than Sitowise in these markets. Yeah, maybe I will first comment that of course all of the players in the market do not have the exact same market in that sense.
Or at least like the services what we are providing do not have exactly the same areas of focus. For example, we are not so much in the process. Or we are not in the process industry. Otherwise, we see that industry is a segment where we see clearly growth. Overall, we see that we are in a very good position there. Infra, we see that we are outperforming the market, and that is of course a very strong message overall. Then digi, being at least in line with the market when it comes to this kind of like a tailored software business. As I have been also highlighting quite many times, this product business is something that actually we can also create the market. It is really much more in our hands, and there, as we today also showed, we are really strongly.
Improving or increasing the business. We are really happy about that one. In the buildings business, I would say that we are more or less in line with the market. At least we see that our performance, and when we compare to some statistics, we are pretty much in line. Okay. Maybe building on Heikki still, what you were saying, I think we can be really proud of the fact that in Digi we have had not have to do any layoffs comparing to other competitors in the market. True, true. Good addition. Talking about the product business, we have a question about the expected SaaS business growth rate. Do you expect it to be at the same level as earlier in future? I would say that our goal is ambitious. As we have said, we want to, like, overall double our.
Digi business by the end of 2030. And then our SaaS business product business should be like half of that Digi business in the future. We are really aiming at having those kind of growth numbers also in the future. Okay. We have a question about the goodwill. What is the risk that you need to write down goodwill and what would need to happen for you to be forced to do that? Yeah, do you want to go? Yeah, maybe I’ll take this one more naturally on the CFO playfield. We’re of course monitoring the situation with the goodwill all the time and measuring the carrying amount and the headroom. At this point in time, there’s nothing to report on that front. Okay. Thank you. I guess this question and answer concludes our Q&A session and this webcast. Thank you again for attending.
We hope to see you if you are Finnish in the Sijoittaja Fair, Investment Fair later this month in Messukeskus in Helsinki. If you cannot join us there, then in our next results call, which is on 11th February next year, and of course about the full year and Q4 performance. Thank you again for participating. Thank you, Heikki and Kim. Thank you.
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