Boreo Plc, INTERIM REPORT Jan. 1 to Sep. 30, 2026

Q3/2026 – CEO Tuomas Kahri:

Strong growth and strengthened balance sheet enable the execution of the acquisition-driven strategy

Boreo’s third quarter of 2026 continued the strong growth trend with 25% organic growth and demonstrated that its long-term strategy is delivering results. In total, net sales increased by 26%, driving a significant 111% improvement in operational EBIT to EUR 3.5 million (8.5% of net sales). During the third quarter, both business areas recorded growth, with Technical Trade growing by 36% and Electronics by 14% compared to the third quarter of the previous year. Both customer demand and deliveries were strong during the quarter, contributing positively to the quarterly result.

As a result of strong growth, the company’s working capital increased. Inventories grew in several companies in anticipation of sales towards the end of the year and in preparation for extended delivery times in the supply chain. The increase in working capital resulted in negative cash conversion. Net cash flow from operating activities was EUR -1.1 million (2025: 2.2).

Boreo continues to execute its long-term strategy, with the new financing arrangement enabling stronger focus on growth

Eight consecutive quarters of net sales growth, together with measures implemented during 2024–2025 to improve cost competitiveness, provide a solid foundation for executing Boreo’s serial acquirer business model. In 2026, the company has three key priorities to support the achievement of its strategic objectives: 1) advancing acquisition activities with a focus on expanding existing businesses, 2) evaluating the role and earnings potential of each company to identify organic and inorganic growth opportunities and guide capital allocation, and 3) strengthen the balance sheet to further accelerate acquisitions and growth initiatives.

Activating acquisitions

Boreo has increased its activity in the acquisition market during 2026. On October 1, 2026, we announced our first acquisition of the year, TEXpro Oy, a manufacturer of bellows, expansion joints and industrial insulation products. TEXpro’s product offering and customer base are familiar to us through Filterit Oy, among others, and the companies belong to the same business cluster.

Our acquisition pipeline has grown, and ongoing negotiations have progressed well. The target companies operate in attractive markets, fit well with our existing business clusters and have attractive profitability profiles. We are well positioned to complete further acquisitions during the final quarter of the year. In addition, we continuously evaluate further potential targets that meet Boreo’s acquisition criteria.

Clarifying the roles of the operating companies

We have further developed our operating model for managing our operating companies. We manage our companies in business clusters, bringing together companies that serve similar customers or product categories. We systematically develop and share customer interface best practices across our companies. Our operating model enables the management of the companies to focus on developing their businesses, while Boreo supports them, for example, in executing acquisitions.

Our companies’ order books remain at the end of June level, clearly above the comparison period in 2025. Increasing economic activity in Finland supports the businesses of Boreo’s companies, despite continued macroeconomic uncertainty. We have been able to achieve rapid net sales growth without a significant increase in costs. The Group’s earnings performance developed very positively during the third quarter. To ensure reliable deliveries during the final quarter of the year, some of Boreo’s companies have increased their inventory levels, resulting in higher working capital during the third quarter.

The short-term demand outlook for companies serving industrial customers remains positive. Strong development in the defense industry and backup power generation continues to support the growth of Milcon and Machinery. Increased willingness to invest among engineering industry customers supports several of our companies, with order intake particularly strong at Machinery MT and Pronius. The outlook for companies operating in the construction industry remains subdued, although customer demand for deliveries towards the end of the year shows signs of a gradual recovery.

Successful refinancing arrangement strengthens Boreo’s M&A firepower

During the third quarter, we completed the refinancing of the company. As part of the arrangement, the company repurchased its EUR 20 million capital securities issued in 2024 and agreed on a new financing package with its main financing bank. At the same time, the company issued new capital securities of EUR 13 million. The average interest cost of the new financing package is markedly lower than that of the previous arrangement, enabling more efficient use of capital.

Strong organic growth, improved gross margins and moderate cost development during the first three quarters of 2026 demonstrate the scalability of Boreo’s operating model. The strong earnings performance is reflected in improved returns on capital, with Return on Capital Employed (ROCE) increasing to 11.6% (2025: 8.2%). Following the new financing arrangement, the company’s net debt in relation to operational EBITDA for the last 12 months stands at 2.6, reflecting the shift from equity-classified capital securities to bank financing.

The new financing package is an important part of executing Boreo’s long-term strategy. It enables Boreo to return to acquisition-driven growth in the coming months and years.

 

Financial guidance and business model

Boreo’s focus is on earnings growth with attractive return on capital. The company's long-term strategic financial targets are:

• Minimum 15% average annual operational EBIT growth
• Minimum 15% Return on Capital Employed (ROCE)
• Net debt to operational EBITDA between 2 and 3 (including acquired businesses as if they had been held for 12 months at the reporting date)

Boreo’s dividend policy is to pay an annually increasing dividend per share, considering capital allocation priorities.

The above-mentioned strategic financial objectives serve as the company's financial guidelines. In line with its guidance policy, the company does not give separate short-term financial guidance.

 

Briefing for investors, analysts and media

A webcast presentation hosted by the company's CEO, Tuomas Kahri, will be held on the publication date at 11:00 a.m. EET. The event will be held in English, and participants may ask questions after the presentation. The presentation material will be available before the webcast begins on Boreo's website at www.boreo.com/investors.

The webcast can be followed at https://boreo.events.inderes.com/q3-2026. A recording of the webcast will be available after the event at www.boreo.com/investors.

 

Vantaa, 29 October 2026

 

BOREO PLC

Board of Directors

Additional information:

Tuomas Kahri
CEO
tel +358 50 435 1944

Distribution:
NASDAQ Helsinki Ltd
Financial Supervisory Authority
Principal media

www.boreo.com

 

Boreo in brief:

Boreo is a company listed on Nasdaq Helsinki that creates value by owning, acquiring and developing small and medium-sized companies in the long-term. Boreo's business operations are organized into two business areas: Electronics and Technical Trade.

Boreo's primary objective is sustainable long-term profit generation. This is achieved with a business model that is based on the acquisition and ownership of great entrepreneurial companies with the ability to generate sustainable long-term earnings growth and strong cash flows. The profits generated by the portfolio of companies are re-invested back to operations or to acquisitions with attractive expected returns on capital. The decentralized operating structure promoting a culture of ownership and release of entrepreneurial energy is a core pillar of the company's business concept and sustainable earnings growth is ensured through the support and coaching of companies and the personnel.

The Group's net sales in 2025 were EUR 153 million and it employs over 300 people in seven countries. The company’s headquarter is in Vantaa.

Boreo_Q32026 Interim_report.pdf