Norrhydro Group Q4'25 preview: We expect the demand turnaround to have continued

Source: Inderes

Translation: Original published in Finnish on 2/16/2026 at 8:52 am EET.

Norrhydro Group will publish its Q4 results on Thursday, February 19. We expect the company to deliver strong revenue growth and a clear improvement in earnings, following the trend of the previous quarter, even though the rate of improvement will slow slightly due to more challenging comparison figures. Forecasting the quarter is subject to more uncertainty than usual, as the company is only now transitioning to quarterly reporting, and therefore, there is limited information on seasonality from previous years. We consider the demand outlook for 2026 to be rather positive and therefore expect the company to provide an upward-trending guidance for both revenue and earnings.

A strong recovery is expected towards the end of the year

We estimate revenue growth to have remained strong at around 20% in Q4. In Q3, revenue grew by as much as 36%, but we estimate that Q4 comparison figures will be higher, which will limit relative growth. There has been a clear recovery in demand in the company's customer sectors during 2025, for example, in mining and material handling equipment. In forest machines, on the other hand, demand has developed more sluggishly, and no significant turnaround has yet been in sight. Revenue has come almost entirely from conventional cylinders – we estimate NorrDigi's share is very low, around 1-2%.

Scale and margin level improvements support profitability

We also estimate that profitability improved significantly from the comparison period, supported by growth. Our forecasts see EBITDA improving to 0.8 MEUR (Q4’24: 0.5 MEUR) and EBIT to 0.5 MEUR (Q4’24: 0.2 MEUR). We forecast the material margin to have improved to 49% from the weak comparison period (Q4'24: 44%), but to remain below the strong Q3'25 level (50%). The strengthening of the material margin is influenced by, among other things, the moderate development of component prices and the recovery of demand. Our Q4 EPS forecast is EUR 0.02 and EUR 0.01 for the full year. We do not expect the company to pay a dividend on its 2025 earnings, due to its relatively high indebtedness. We estimate net debt at year-end to be 9.4 MEUR (2024: 9.6 MEUR), which would equal 3.6 times the estimated 2025 EBITDA (2024: 7.6x).

Conventional cylinders still have growth potential for 2026

We expect the company to be able to continue revenue growth, driven by the cylinder business, during 2026 as well (total growth 2026e: 9%, traditional cylinders: 7%). We estimate that the strengthening of demand in 2025 indicated a return to a more normal demand environment rather than a peak in the business cycle. Construction and the forest machine market are still in a weak state, and their recovery could, over some timeframe, support demand for the company's products, although the timing of a turnaround is uncertain. NorrDigi's growth impact is small in our current forecasts for 2026 (+0.8 MEUR y/y), and in our view, this growth business is subject to high uncertainty, partly elevated by the recently announced departure of the Director of Digital Business. On the other hand, changes in NorrDigi's resourcing could support the Group's profitability and the progress of the profitability turnaround during 2026. Our EBITDA forecast for 2026 is 3.5 MEUR (a 2 percentage point improvement in margin), which requires strong operational efficiency from the company in addition to growth.