Translation: Original published in Finnish on 7/11/2025 at 7:02 am EEST.

Source: Inderes

Componenta will publish its Q2 report on Wednesday, July 23, at 8:00 am EEST. We expect revenue to have continued its upward trend, supported by acquisitions, and for profitability to have remained roughly at the satisfactory level seen in Q1, given the business environment. In terms of customer segments, we anticipate that the defence industry will drive growth, while the persistently sluggish agricultural machinery market will weigh on production volumes. The bar for guidance is set very low after Q1, so we would not be surprised to see it revised. Our focus is on the commentary regarding the outlook, which we expect to be bullish for the rest of the year.

Revenue grows with the support of acquisition

Componenta entered Q2 with an order book of 17.4 MEUR (2 months' firm order book), which was 10% higher than last year. According to our estimates, the main driver of order book growth was the business acquisition completed in Q4'24, meaning we believe the order book's organic growth was minimal.

Supported by the stronger order book, we expect Componenta's revenue to have increased by 14% to 30.2 MEUR in Q2. Business acquisition is also the main growth driver in terms of revenue. In terms of customer segments, organic growth is supported by the defence equipment industry, where deliveries of the four-year 50 MEUR order announced last year have continued. In the largest customer segment, machine building, we anticipate Componenta to have achieved slight growth, supported by slightly positive volume developments in Finnish machine building companies. We expect the agricultural machinery segment, an important one for Componenta, to have continued its sluggish development in Q2, undermining growth in other customer segments. We anticipate that the energy industry's share of revenue is clearly on the rise, as we estimate that revenue from acquired businesses will be reflected almost entirely in this customer segment. We expect the forest machinery and others segments to have grown slightly from the relatively weak comparison period.

We predict that Q2's seasonally weak order intake will surpass the comparison period substantially, and that the order book will increase to 13.5 MEUR (+25% y/y), with growth mainly explained by last year's business acquisitions.

We expect satisfactory profitability despite low utilization rates

We expect Componenta's EBITDA to have come in at slightly above 2.4 MEUR in Q2’25, which corresponds to an improved EBITDA margin of 8% year-on-year. Cost drivers in terms of both electricity and iron developed favorably for Componenta in Q2, which we expect will support profitability in the quarter. Since the main raw materials are indexed to selling prices, the impact of energy and material price movements on profitability is short-term. As in Q1, we expect volume, the main profitability factor, to have remained low in foundry operations due to weak demand for agricultural products and an uncertain economic environment. On the lower lines, we expect depreciation of -1.4 MEUR, financial expenses of -0.5 MEUR and zero taxes for Q2. After these adjustments, we expect earnings per share to settle at EUR 0.05.

Current guidance sets the bar low

Componenta guides for an improvement in revenue and EBITDA from the previous financial year. We estimate that the business acquisition completed in 2024 will support revenue by more than 10 MEUR, and about half of the EBITDA for the comparison period has been accumulated after Q1'25, which means that the bar set by the guidance for the end of the year is quite low, and we expect the company to easily reach its guidance. Therefore, we would not be surprised to see a revision or increase to the guidance as part of the half-yearly report. Business environment indicators are currently bullish, but uncertainty about the timing and pace of demand recovery remains high. For instance, the CEMA index, which indicates the direction of the European agricultural machinery market, took a slight step backward in June after a strong start to the year.