Purmo Q3'24 preview: The last reporting formality

Translation: Original published in Finnish on 10/21/2024 at 7:14 am EEST.

Purmo will report its Q3 results on Tuesday. The company is now 98% owned by Grand Bidco following the tender offer in August and the redemption proceedings for the remaining shares are underway. As a result, the company will be delisted in the coming months. The Q3 report will be the last in Purmo's stock market career, and we do not believe that its contents will have any further impact on the stock.

We expect steady development year-on-year, changes in guidance unlikely

We expect Purmo's Q3 revenue and adj. EBITDA to be roughly in line with the comparison period. Purmo's efficiency program should continue to provide some margin support, but on the other hand the still slightly declining revenue and cost inflation will weigh on the result. Purmo's guidance for the full year 2024 is that adjusted EBITDA will be at the same level or above compared to 2023 (92.3 MEUR). Our forecast is 94 MEUR, which is within the company's definition of "at the same level" (+/- 5%). We do not believe that there will be any changes to the guidance at this stage.

Many minor developments in the company recently

In recent weeks, Purmo has announced a number of minor developments that do not affect the share at this stage (when it is in the redemption proceedings), but we will briefly review them here. At the beginning of October, the company announced the acquisition of Unitherm Heating Systems from Ireland, with revenue of approximately 28 MEUR in 2023, or just under 4% of Purmo's revenue. We understand that Unitherm is a distribution/service company, so its profitability is likely to be lower than Purmo's and therefore the earnings contribution will be limited. In mid-October, Purmo announced that CFO Jan-Elof Cavander would leave the company at the end of Q1'25. The company's Chief Operating Officer and former CFO Erik Hedin had already resigned in August. In addition, the company announced a week ago that it will redeem the capital securities in February 2025 as part of the company's changes in ownership and financing.

Redemption proceedings and delisting underway

The Purmo share redemption proceedings are underway, and the company has announced its intention to delist from the stock exchange as soon as possible. This is expected to occur in the coming months, and we believe that the Q3 report will be Purmo's last as a public company.