Source: Inderes

Translation: Original published in Finnish on 2/19/2026 at 9:23 am EET.

Norrhydro Group released its Q4 earnings report today. The report was slightly stronger than our expectations in terms of earnings and cash flow, even though revenue growth was a bit below our forecast. The company's 2026 guidance and comments largely met our expectations, and this, combined with the strong Q4 result, significantly reduces forecasting uncertainty.

Revenue grew significantly at the end of the year

Q4 revenue was 7.7 MEUR, an increase of 16% from the comparison period. Revenue was thus slightly — but not significantly — below our estimate (we estimated 20% growth). The company sees demand recovering in certain industries, which we estimate include mining and material handling. At the same time, a few key customer segments, such as the forest and construction sectors, are still suffering from a weak market situation, in our view.

Profitability developed strongly

The earnings lines developed slightly stronger than our forecasts, and significantly stronger relative to revenue. The earnings improvement was primarily due to the scalability of volumes, but also influenced by efficiency measures implemented in recent years. Q4 EBITDA was 0.91 MEUR (we estimated 0.84 MEUR) and EBIT was 0.58 MEUR (we estimated 0.52 MEUR). EBITDA nearly doubled year-on-year (Q4’24 EBITDA: 0.49 MEUR), and the relative EBITDA margin improved to 11.7% (Q4’24: 7.4%). The result was supported by a strong gross margin and lower personnel costs than estimated. The material margin improved to 49.9% from a weak comparison period level (we estimated 49.5%, Q4’24: 44.0%). Financing costs were also slightly lower than our forecasts, which supported the net result (Q4'25 net result: 0.31 MEUR).

Cash flow slightly above forecast, authorization for capital repayment to be continued

The company's net debt at year-end was 9.1 MEUR, slightly lower than our forecast (9.4 MEUR), and decreased year-on-year (2024: 9.6 MEUR). The Board proposes an authorization for a capital return of EUR 0.04 per share at the Board's discretion. A corresponding authorization has been in effect since the previous Annual General Meeting.

Favorable development is expected to continue

The company expects profitable growth to continue in 2026. The guidance expects revenue of 30-32 MEUR (growth of 5-11%) and EBITDA of 3-4 MEUR (2025: 2.65 MEUR). Our latest forecasts are for revenue of 31.6 MEUR and EBITDA of 3.5 MEUR, which are within the guidance ranges. The company expects "a quiet recovery to continue" in terms of market demand. Sales and tender activity are increasing, and the company plans to boost sales efforts in the current year. At the same time, cost-saving projects will continue. In addition to conventional cylinders, the company expects sales of NorrDigi EMA electromechanical cylinders to grow this year (and in the coming years). Regarding the NorrDigi MCC excavator application, tests are still ongoing, which somewhat limits visibility. Our growth forecasts for 2026 have been primarily based on conventional cylinders, and we consider the company's comments on NorrDigi to be in line with our expectations.