Translation: Original published in Finnish on 9/23/2026 at 10:10 pm EEST.

Merus Power will host a Capital Markets Day (CMD) on Wednesday, September 30, 2026. The strategy's informational value could be significant, as it has been over five years since the previous strategy was presented, during which time both the company and the energy storage industry as a whole have evolved enormously. We expect the company to target strong profitable growth in the new strategy period, with the focus shifting more clearly toward the internationalization of the energy storage business.

Major growth leap under the previous strategy

The company's latest communicated strategy and financial targets date back to the IPO (2021), when the company set a target of reaching a revenue of 80 MEUR by 2026, primarily through energy storage-driven growth. In our view, the company has succeeded quite well in advancing its growth targets, as revenue is estimated to grow to 59 MEUR this year (2020-21: 6.5-14.8 MEUR) and the order book is strong also looking toward 2027 (H1'26 order book +70% y/y). Although growth falls somewhat short of the target, the direction has been right. The company has taken significant strategic steps by, among other things, achieving a strong market position in energy storage in the Finnish market and expanding into international energy storage markets (Poland and the Baltics).

The company differentiates itself from integrator-type competitors by manufacturing the power electronics, control units, and software used in energy storage systems itself.  The company has strong engineering expertise and has been at the forefront of introducing new technical features to energy storage systems (such as grid-forming and hybrid control technologies). Chinese technology has been actively present in the competitive landscape for several years, which, in our view, has not prevented the company from succeeding. EU restrictions on non-EU (Chinese) technology in energy storage power electronics could reduce competition in the future, especially in EU-funded energy storage projects.

Power quality solutions continue to be a part of the company's business and partly form the foundation of its technological expertise. However, the segment's revenue has not grown significantly in recent years, which we estimate is particularly due to the cyclical nature of the industry (dependence on factors such as steel mill investments). We expect the company to pursue growth in this area as well, but its significance is likely to be overshadowed by energy storage.

Estimated revenue by segment (MEUR)

Source: Inderes’ estimate

Growth strategy focus is shifting toward internationalization

Merus Power's revenue has grown by as much as 41% p.a. in 2022-25, but in the current scale, we do not see it likely to maintain a corresponding percentage growth. Revenue growth according to our current forecasts is 15% p.a. in 2027–30 (2026e: 59 MEUR -> 2030e: 102 MEUR), which is close to the estimated overall growth of the European energy storage market. The pace of international expansion and the development of the energy market will largely determine the growth trajectory. In Finland, the demand outlook for electricity is growing strongly, driven by factors such as data centers and the electrification of society. On the other hand, renewable energy is currently not being built at the pace of previous years, which, if the situation persists, may also limit the growth of the energy storage market over time. Expanding the target market outside Finland diversifies country-specific risk and enables growth in more untapped markets, where renewable energy production capacity and energy storage capacity are still further from their potential.

Even a single-digit EBITDA margin could enable strong value creation

In its 2021 strategy, the company set itself a high EBITDA margin target of 15%, which it has not come close to achieving during the strategy period (2025: 3.3%, 2026e: 5.3%). In our view, the profitability profile of the entire industry was still shrouded in uncertainty back in 2021. As the market has grown, the industry has turned out to be relatively low-margin, which is partly due to the fact that subcontracted batteries account for a significant share of total revenue. Even the most profitable Western competitors have in recent years achieved an EBIT margin of at most 5% (to the extent that data is available). Even a low-margin business can create value for investors, because the production of energy storage ties up relatively little capital, and even with low margins it is possible to achieve good returns on invested capital.

Merus Power has embarked on an upward profitability path in 2025-26, which we expect to continue during the new strategy period as well. We forecast the EBITDA margin to gradually improve to 7.2% by 2030 (EBIT 2030e: 5.0%). The key drivers for strengthening profitability are the learning of the young organization, improved operational efficiency, and stronger scale. Although the profitability we estimate sounds low compared to the target presented by the company in 2021, it is worth noting that the return on investment forecast (ROI 2030e) is 18%, which can be considered strongly value-creating.

Profitability development

Source: Inderes’ estimate

Growth may still require strengthening the balance sheet

At the end of H1'26, the company had net cash of 1 MEUR, which, combined with the recent profitability turnaround, could enable operations to run without measures to strengthen the balance sheet. However, should the company wish to pursue strong growth during the new strategy period, it may need additional balance sheet reinforcement in the form of equity to finance net working capital. The need for financing naturally also depends on the progress of the profitability turnaround. So far during its time on the stock exchange, the company has raised equity twice: 12 MEUR in connection with its 2021 IPO and 2 MEUR through a directed share issue in 2025.

Key questions for CMD

• How ambitious is the targeted growth?
• How do the growth targets affect the company's risk profile or profitability?
• Does the internationalization strategy prioritize consolidating positions in a few already-established markets, or rapid expansion into new ones?
• Will additional equity be needed to fund the growth?
• How well can the company's competitiveness hold up against price-competitive Chinese technology?