Translation: Original published in Finnish on 11/11/2025 at 07:45 am EET

Source: Inderes & Bloomberg (consensus)

Orthex will publish its Q3 report on Thursday at 9:00 am EET. After the varied revenue development in the early part of the year, our attention is particularly drawn to the revenue of the reporting period. As in the early part of the year, we expect invoiced sales in the Nordic countries to decrease slightly, but healthy growth from export markets in line with Q2. We will review the interim report on Thursday in our earnings live (in Finnish) starting at 8.55 am EET.

We expect good growth from the export markets

In terms of growth, Orthex's year started poorly, as the Nordic countries suffered from a reduced number of campaigns by partners and the company had to restrict sales to some of its distribution partners in export markets due to increased credit risks. We expect the company’s revenue to to have turned to 1% growth in Q3. We expect a cautious decline in invoiced sales in the Nordic countries year-on-year, while export markets achieve good growth in our estimates, supported by expanded distribution. In our view, Orthex's European distribution network, more so than in the Nordic countries, consists of partners like department stores that perform weaker in a soft demand environment, and the impact of this was emphasized in Q1. We expect exchange rate changes to have a small positive impact on the company's revenue.

The contraction in raw material prices enables slight earnings growth in our estimates

In terms of profitability, Q3 is without exception Orthex's strongest quarter, enabled by a favorable sales structure and a lighter cost structure due to the vacation season. During the quarter, Orthex's raw material prices have, in our view, decreased slightly from the comparison period, which enables a small earnings improvement in our estimates despite the increased cost structure from growth investments. In our estimates, the company's comparable EBIT is 2.9 MEUR, which is at the lower end of consensus estimates. 

This year will fall short of the financial targets

Orthex has not provided guidance during its time as a public company, and we do not expect it to provide guidance in connection with the report either. We expect the company's revenue to decline by 1% this year to 89 MEUR due to weakened invoiced sales in the Nordic countries. Our comparable EBIT forecast is set at 10.2%. For the current year, both will fall quite clearly short of the company's targeted 5% revenue growth and 18% EBITA margin. We consider the company's growth target achievable over the cycle, but achieving the EBITA margin appears distant based on the company's historical profitability. The company's management has mentioned ongoing strategy work, in connection with which we consider an update to the financial targets possible. Due to Orthex's high profitability, updating the growth target to be more ambitious at the expense of profitability and profit distribution targets would, in our opinion, be well warranted.