Merus Power: New order supports growth outlook for current year

Translation: Original published in Finnish on 1/28/2026 at 9:15 am EET.

A new significant energy storage project improves visibility into revenue growth during 2026. Our growth estimate is quite modest (6%) and could be subject to upward pressure, especially if the company secures more significant orders during H1. We also expect the company to be able to improve profitability through repetition and learning, although there may be downward pressure on the margin levels of energy storage projects due to the increasing relative number of batteries. Although the order supports the growth outlook, we do not currently see a clear need for forecast changes. We will review our estimates at the latest in connection with the financial statement release (February 5).

System delivery with large battery capacity

Merus Power announced on Tuesday at 4 PM (EET) that it had signed an energy storage deal with Neve Oy, an energy and infrastructure company owned by the city of Rovaniemi. The value of the deal is 13 MEUR, and it will be delivered by the end of 2026. Merus Power acts as the system supplier for the project, meaning the delivery does not include buildings or the main transformer, but only the core technology for the energy storage systems.

The energy storage has a power output of 30 MW and a capacity of 80 MWh, meaning the ratio of batteries to power is higher than in the company's previous projects (previously 1:1 and 1:2). However, in terms of technical implementation, the delivery is practically identical to the company's previous deliveries, with the difference that the number of batteries connected to the system is higher. Although the number of batteries is clearly higher relative to the project's value than in previous projects, the project's margin level may not differ significantly from previous ones. This is due to factors such as decreasing battery prices and the fact that the scope of delivery is limited to the core technology of the system. Some previous energy storage deliveries have been so-called turnkey deliveries, including construction and the delivery of a main transformer.

The order facilitates providing growth guidance

The project's timing is favorable for Merus Power, as it clearly improves visibility into the company's 2026 deliveries from the perspective of the factory and procurement organization. Based on the orders announced by the company, revenue from energy storage can be expected to grow during 2026, while revenue from power quality solutions is expected to decline (without new large, rapidly delivered orders). Overall, we have estimated Merus Power's revenue to grow by 6% to around 49 MEUR in 2026. With the latest energy storage order, the uncertainty associated with the forecast has significantly decreased, and there could be upward pressure on the growth outlook, especially if the company announces more orders in H1.

However, we do not expect the latest order to affect the 2027 growth outlook, as we have already assumed growth to accelerate in that year, influenced by factors such as the timing of energy storage orders and the recovery in demand for power quality solutions. We estimate that the falling prices of batteries and volatile electricity prices in Finland will continue to make energy storage an attractive investment, supporting Merus Power's demand outlook. Demand in the investment-driven market may fluctuate occasionally, but for now, the market looks good. Expanding the revenue base outside Finland would significantly strengthen the company's growth potential and diversify risks related to market demand fluctuations.

Opportunity to continue improving profitability during 2026

The company's energy storage-driven growth has not been profitable in previous years, which has been influenced by strong recruitment, the commissioning of new facilities, and initial difficulties related to new large-scale projects. The positive revenue trend and the increased efficiency of the organization's processes provide Merus Power with a good foundation to improve profitability during 2026. We forecast the company's EBITDA to have risen to 2 MEUR in 2025 and to improve further to 2.5 MEUR in 2026. Potential challenges to profitability could be related to, for example, the margin level of energy storage projects as the relative number of batteries increases, and potential cost overruns when expanding into new foreign markets, such as Poland.