Norrhydro returned to a path of profitable growth in 2025. Both revenue and profitability improved compared to the previous year, and revenue growth was supported by a recovery in demand in certain customer industries.
Profitability strengthened as revenue and volumes increased, while fixed costs grew more slowly than revenue. The economic recovery in the Company’s main markets in Finland and Europe has been slow. The normalization of customer demand has been delayed; the trade policy shifts seen during the year and Russia’s ongoing war of aggression against Ukraine, which continues to affect Europe, have contributed to uncertainty in the investment environment.
Increasing uncertainty is weakening end customers’ willingness to invest, and this uncertainty is expected to continue during the current year. However, we expect the gradual economic recovery to continue during 2026.
Inflation has normalized and settled at around the 2% target level, in Finland even below that. Keeping inflation at the target level supports end customers in planning and implementing their investments in the coming years. The recovery and growth of the economy also create conditions for an increase in end-customer investments.
The tightness of the financial markets has a general impact on investment appetite. Banking regulation and weak economic development have reduced financial institutions’ ability to offer financing on competitive terms. Despite expectations, the lower interest-rate level has not steered the economy onto a strong growth path. In Finland and Europe, monetary policy, which remains relatively tight, will continue to affect the level of investments during 2026 as well. The recent discussions and plans to ease financial market regulation would be welcome measures to strengthen companies’ investment opportunities and willingness to invest.
Significant investments in the defence equipment industry and NATO’s defence spending rising to 5 percent of gross domestic product will increase defence sector investments in the coming years, including in the manufacture of so-called dual-use products. These investments will also have a positive impact on other industries. Norrhydro has customers who sell dual-use products and defence industry products to their own customers. Therefore, the growing demand in the defence equipment industry will in future have positive effects on our company’s revenue as well.
In 2025, we invested in sales, and we plan to increase our investments in both marketing and sales in 2026. Both the number of quotation activities and sales have shown growth, and thanks to our measures, we have reached potential customers, target customer groups, and new customers. In our industry, sales projects are relatively long and usually take 1–3 years. We believe that the increased investments and growth in activities will support the company’s positive development both in the current and in the coming years.
During the current year, we will also continue the measures in our cost-saving projects as well as the further development of our operational activities. Through these activities, we will continue to improve our cost-efficiency, the level of customer service, and the efficiency of cash flow.
For our digital products, the NorrDigi EMA actuators have reached a maturity level, and broader marketing and sales activities have begun. The electric actuators are being marketed globally, and we have identified several promising customer segments to which we are actively marketing these products. We expect NorrDigi EMA sales to grow during the current financial year and in the years to come.
For the NorrDigi MCC system, field tests are still ongoing. The main maturity level of the system has already been reached, but especially in relation to the excavator and its operation, additional testing is still required. We believe that all necessary tests will be completed during 2026, after which broader marketing and sales efforts can begin.
Norrhydro’s strategy has been clarified, and our main strategic objective is to be “the world’s best cylinder manufacturer”. Partner in Success remains unchanged. Our product portfolio includes hydraulic cylinders, digital energy-efficient linear motion systems, and electric cylinders. The strategy has been compiled into the One Norrhydro message, which aims to strengthen understanding of the strategy throughout the organization and among other key stakeholders.
We expect profitable growth to continue during 2026.
