Figures in parentheses refer to the corresponding period of the previous year.
August - October 2025 in Brief
- Q3 revenue decreased by 13 % to EUR 29.4 million (EUR 33.6 million).
- Q3 gross profit decreased to EUR 11.4 million (EUR 14.0 million).
- Q3 adjusted EBITDA was EUR 3.1 million (EUR 3.6 million).
- Q3 net cash from operating activities was EUR 3.2 million (EUR 4.2 million).
- The impairment test concerning Group’s assets was made at the end of October and as a result write down of goodwill with EUR 14.7 million is booked in Q3 Interim Report. Write down is allocated to CGU1 (cash generating unit), which consist mostly of roof installation business in Finland. The Group has published a press release for the impairment test in the beginning of December.
- HLRE Holding Oyj’s main shareholders have evaluated the possibility to strengthen HLRE Holding Group’s shareholder equity during Q4 in order to cover the Group’s financial statements negative equity because of goodwill write down. The process for the equity strengthening could be executed by either converting shareholders’ loans into equity or debt forgiveness of shareholder loans. The equity strengthening process is subject to other finance arrangements during the Q4. Total amount of shareholders’ and convertible loans including deferred interests is EUR 20.4 million at the end October.
- According to the financial bond agreement The Group will make covenant tests on a quarterly basis and report test results for the Bond Agent and bond investors. The Group meets the liquidity covenant at the end of October, but the Group does not meet the new leverage covenant, which has been applied for the first time now in Q3/2025. The Group has published a press release for the covenant breach at the end of November. The Group has also informed Bond Agent for the breach of the leverage covenant.
- The Group has started finance negotiations with the major bond investor because of the covenant breach and overall because of the tight finance status in the company. Because of the covenant breach, the Group has booked bond debt and shareholder loans as short term financial liabilities instead of long term financial liabilities.
February – October 2025 in Brief
- Q1-Q3 revenue decreased by 1 % to EUR 78.3 million (EUR 79.3 million).
- Q1-Q3 gross profit decreased to EUR 29.8 million (EUR 31.6 million).
- Q1-Q3 adjusted EBITDA was EUR 3.5 million (EUR 4.6 million).
- Q1-Q3 net cash from operating activities was EUR 4.4 million (EUR 1.6 million).
Key Figures
|
HLRE HOLDING GROUP EUR Million |
Aug– Oct 25 Q3 |
Aug– Oct 24 Q3 |
Feb- Oct 25 Q1-Q3 |
Feb- Oct 24 Q1-Q3 |
Feb 24 – Jan 25 Q1-Q4 |
| Revenue | 29.4 | 33.6 | 78.3 | 79.3 | 102,9 |
| Gross profit | 11.4 | 14.0 | 29.8 | 31.6 | 37.3 |
| Gross margin,% | 38.8 % | 41.7 % | 38.1 % | 39.8 % | 36.2 % |
| Adjusted EBITDA | 3.1 | 3.6 | 3.5 | 4.6 | 1.8 |
| EBIT | -13.6 | 1.9 | -16.1 | -0.6 | -5.1 |
| Net cash from operating activities | 3.2 | 4.2 | 4.4 | 1.6 | 0.1 |
*Adjusted EBITDA for the period of
Q1-Q3 February - October 24 has been revised to EUR 4.6 million (previously reported EUR 5.0 million)
Q1-Q4 February 24 – January 25 has been revised to EUR 1.8 million (previously reported EUR 2.2 million).
The Group received one-off compensations for leasing argreements and capital gains from sold tangible assets in the last financial year, which has not previously recorded as an extraordinary item.
Company description
HLRE Holding Group (commonly known as Vesivek Group) is a leading provider of roof and roof product renovations, primarily offered to detached and row houses in Finland and Sweden under the Vesivek brand. In addition to roof and roof product installations, Vesivek provides underground drain renovations in eight locations in Finland. The Group develops, manufactures, and sells high quality rainwater systems and roof safety products.
HLRE Holding Group operates in 13 locations in Finland and three locations in Sweden and employing an average of approximately 600 employees. The Group has two production facilities in Finland, steel roofing profile production in Pirkkala and the production of rainwater systems and roof safety products in Orimattila.
Management Overview of the third quarter
The Group's revenue and gross profit decreased in the third quarter compared to the same period last year. In Sweden the roof installation business performed very well. Revenue increase was 13 % and gross profit increase 42 %. However, In Finland roof installation and roof product sales decreased -17 % compared to last year due to the very low economic activity in Finland. Gross profit decreased -32 % from the previous year level. Q3 results fell short of our forecast.
The Group has executed two major reorganization measures in Q3/2025.
HLRE Holding Group announced in the beginning of August that it will restructure its organization and operational processes and will initiate change negotiations. In addition to changes in operating practices, the aim of the negotiations was to reduce management layers and enhance the efficiency of the sales organizations in Finland. The negotiations started on 11 August 2025 and ended on 18 August 2025, and concerned all personnel of HLRE Group Ltd, Vesivek Ltd, and Vesivek Salaojat Ltd, excluding installers and foremen. Vesivek Tuotteet Ltd, Tuusulan Peltikeskus Ltd, and Vesivek Sverige AB were entirely excluded from the change negotiations. As a result of the change negotiations, the number of personnel will decrease by 60 employees. Together with other changes in personnel in August, the total amount of employees will decrease by 71 employees from July head count. The personnel changes are estimated to generate annual savings of EUR 4.5 million.
At the end of September, HLRE Holding Group announced that it would initiate change negotiations concerning installation personnel. The aim of the negotiations was to reorganize installation work and adjust the current installation capacity to the reduced sales volumes. The negotiations began on 6 October 2025. They concerned installers and foremen at Vesivek Ltd and Vesivek Salaojat Ltd. As a result of the negotiations, the number of personnel will be reduced by 34 employees. In addition, in the negotiations it was decided on seasonal layoffs during the winter period, affecting up to 83 persons. The personnel changes are estimated to generate annual savings of approximately EUR 2.0 million for the Group.
Third Quarter August - October 2025
Q3 revenue decreased by 13 % to EUR 29.4 million (33.6 million). Revenue grew in roof installation business in Sweden, but decreased in roof installation business in Finland. Gross profit was EUR 11.4 million (14.0 million).
Q3 reported EBITDA was EUR 2.8 million (3.6 million) and adjusted EBITDA EUR 3.1 million (3.6 million). The reported one-off items for Q3 August – October 2025 concern received capital gains from sold tangible assets (vehicles) and restructuring costs from change negotiations.
Q3 operating cash flow was EUR 3.2 million (4.2 million). Cash flow decreased due lower profitability and higher paid interest costs. The change in cash and cash equivalents was EUR +2.5 million.
February - October 2025
Q1-Q3 revenue decreased by 1 % to EUR 78.3 million (EUR 79.3 million). Q1-Q3 gross profit decreased to EUR 29.8 million (EUR 31.6 million). Revenue and gross profit grew especially in roof installation business in Sweden, but decreased in roof installation business in Finland.
Q1-Q3 reported EBITDA decreased to EUR 3.6 million (4.8 million) and adjusted EBITDA to EUR 3.5 million (4.6 million). Reported adjustments in Q1-Q3 mainly concerned received capital gains from sold tangible assets (vehicles) and restructuring costs from change negotiations.
Q1-Q3 net cash from operating activities was EUR 4.4 million (EUR 1.6 million). Cash flow increased due to the positive changes in working capital, lower net financial items and lower paid taxes. The change in cash and cash equivalents was EUR +1.3 million.
Outlook for the financial year 1 February 2025 – 31 January 2026
Market growth expectations for the installation business in Sweden are strong, and we expect growth in Swedish business to continue in Q4. In Finland, on the contrary, market growth expectations will remain low.
The Group has executed major change restructuring measures during the second half in order to improve profitability towards the year end in Finnish roof installation business. We expect that the EBITDA will increase in Q4 compared to the previous year level mainly due to the business growth in Sweden and cost saving operations in Finland.
Risks and Business Continuity
The Interim Report for the period of February 25 – October 25 has been prepared based on the going concern principle, assuming that the Company will have positive operating cash flow sufficient to meet it’s obligations as part of normal business operations in the foreseeable future.
The Group's revenue and operating profit are affected by the general economic situation, which in turn is influenced by many factors beyond the Group's control. The Group currently operates in Finland and Sweden. Currently, most of the Group's operations are located in Finland. Accordingly, the Group's revenue and operating profit are particularly sensitive to general economic conditions and perceptions of future general economic situation in the Finnish and Swedish markets.
Uncertainty or adverse developments in the general economic situation may affect the Group's business and demand for the Group's products and services, among other things, by affecting consumer confidence and adversely affecting the business of the Group's corporate customers who purchase the Group's rainwater systems and roof safety products. It is important to note that the general economic situation may adversely affect the level and cost of financing available to the Group's consumer and corporate clients to make investments in renovations and refurbishments. In addition, rising financing costs and a decrease in the level of available financing may adversely affect the Group's ability to make investments and achieve its strategic objectives, as well as adversely effect on the Group's business, financial position and results. Through its manufacturing operations, the Group is furthermore exposed to fluctuations in certain commodity prices (such as steel, aluminum and wood) and energy prices (especially through fuel costs for vehicles) and price increases due to economic disruptions and changes in general market conditions may adversely affect the Group's business, financial position and results. All the above factors may harm the Group's operations, and the Group cannot anticipate how the future economic environment and market conditions may affect the Group's operations.
In general, the frequency of accidents at construction sites is noteworthy and the Group operates in a business segment subject to extensive laws and regulations regarding the work environment. Despite the required health and safety measures and, for example, the use of scaffolding to improve employee safety on construction sites, the Group is exposed to potentially fatal accidents at workplaces, particularly on roofing renovation sites, but also at its production facilities. In addition to physical injuries, the Group’s employees are exposed to risks related to hazardous substances, as some of the Group’s renovation sites contain asbestos. Respectively, the Group must comply with specific environmental regulations with respect to asbestos. Finnish legislation has particularly strict requirements for any activities involving asbestos and the safety requirements for such activities. Failure to comply with the regulations concerning health and safety or asbestos related activities may result in liability for the Group and/or the Group’s permit being revoked. For example, if Group’s permit to handle asbestos would be revoked, the Group would need to stop all business activities relating to handling of asbestos and acquire the work through subcontractors. In addition, any potential accidents and health impacts adversely affect employee well-being. The Group as an employer is exposed to risks related to health and safety issues of its employees, which may lead to a decrease in employees’ ability to work.
The Group’s management has prepared financial forecasts for revenue, expenses and investments, taking into account the extensive efficiency measures. In assessing the going concern assumption, management believes that the company’s current liquid funds and projected operating cash flows will be sufficient to cover its liabilities and obligations arising from its operations for at least 12 months, so the interim financial statements have been prepared on a going concern basis. The management also believes that the Group is able to get a waiver concerning the leverage covenant breach at the end of October.
Due to general economic uncertainty, industry cyclicality, and the short time horizon of the order book, forecasting involves a higher degree of judgment than usual. Such factors would also affect the valuation of Group’s goodwill and the shares and receivables of the parent company’s subsidiaries at the balance sheet.
The Finnish roof renovation and roof product installation business has not performed as planned in the first 9 months and EBITDA level has been much lower than estimated. Finnish economy has not recovered as estimated during the year 2025. The Group went through the change negotiations in August and October, which resulted in a decrease of 94 persons. Delays in recovery in Finnish roof renovation business has realized the risk that the Group did not met new leverage covenant requirement at the end of October 2025. The Group’s saving measures should improve financial results in the fourth quarter.
Additional information
Juha Nuutinen, CFO
+358 50 438 0984
| HLRE Holding Group | |||||
| 2611405-7 | |||||
| Consolidated Statement of Comprehensive Income | |||||
| 1000 EUR | 1.8.-31.10.2025 | 1.8.-31.10.2024 | 1.2.-31.10.2025 | 1.2.-31.10.2024 | 1.2.2024-31.1.2025 |
| REVENUE | 29 429 | 33 636 | 78 266 | 79 295 | 102 929 |
| Other operating income | 479 | -244 | 1 236 | 769 | 997 |
| Material and services | -11 652 | -12 852 | -29 429 | -29 877 | -39 350 |
| Employee benefits expense | -11 646 | -11 629 | -31 941 | -31 092 | -43 459 |
| Depreciation and amortisation | -16 343 | -1 693 | -19 678 | -5 265 | -6 937 |
| Other operating expenses | -4 824 | -5 319 | -14 552 | -14 402 | -19 232 |
| OPERATING PROFIT | -13 557 | 1 900 | -16 097 | -572 | -5 052 |
| Finance income | -285 | 18 | 205 | 931 | 551 |
| Finance cost | -1 190 | -1 134 | -5 100 | -3 526 | -5 129 |
| Finance income and expense | -1 475 | -1 116 | -4 895 | -2 595 | -4 579 |
| PROFIT/LOSS BEFORE TAX | -15 032 | 783 | -20 992 | -3 166 | -9 630 |
| Tax on income from operations | 220 | -203 | 1 219 | 357 | 1 284 |
| PROFIT/LOSS FOR THE PERIOD | -14 812 | 580 | -19 773 | -2 810 | -8 347 |
| Profit attributable to: | |||||
| Owners of the parent company | -14 796 | 489 | -19 920 | -2 681 | -7 932 |
| Non-controlling interests | 164 | 91 | 147 | -129 | -414 |
| -14 812 | 580 | -19 773 | -2 810 | -8 347 | |
| Other comprehensive income: | |||||
| Items that may be reclassified subsequently to profit or loss | |||||
| Exchange differences on translating foreign operations | 60 | -11 | 107 | -61 | -33 |
| Items that may be reclassified subsequently to profit or loss | 60 | -11 | 107 | -61 | -33 |
| TOTAL COMPREHENSIVE INCOME | -14 752 | 569 | -19 666 | -2 870 | -8 380 |
| Total comprehensive income attributable to: | |||||
| Owners of the parent company | -14 922 | 479 | -19 823 | -2 736 | -7 963 |
| Non-controlling interests | 170 | 90 | 157 | -134 | -417 |
| -14 752 | 569 | -19 666 | -2 870 | -8 380 | |
| HLRE Holding Group | |||
| 2611405-7 | |||
| Consolidated Statement of Financial Position | |||
| 1000 EUR | 31.10.2025 | 31.10.2024 | 31.1.2025 |
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Goodwill | 20 573 | 35 273 | 35 273 |
| Intangible assets | 498 | 609 | 629 |
| Property, plant, equipment | 7 894 | 9 720 | 9 310 |
| Property, plant, equipment, right-of-use | 10 504 | 12 685 | 13 384 |
| Other non-current financial assets | 51 | 48 | 48 |
| Loan receivables | 1 | 6 | 5 |
| Deferred tax assets | 4 605 | 2 740 | 3 256 |
| NON-CURRENT ASSETS | 44 126 | 61 081 | 61 904 |
| CURRENT ASSETS | |||
| Inventories | 11 518 | 11 855 | 11 228 |
| Trade and other receivables | 9 328 | 9 672 | 9 494 |
| Loan receivables | 43 | 49 | 625 |
| Income tax receivable | 438 | 756 | 724 |
| Cash and cash equivalents | 3 865 | 5 125 | 2 498 |
| CURRENT ASSETS | 23 192 | 27 457 | 21 115 |
| ASSETS | 67 318 | 88 536 | 83 019 |
| EQUITY AND LIABILITIES | |||
| Owners of the parent company | |||
| Share capital | 80 | 80 | 80 |
| Reserve for invested unrestricted equity | 18 002 | 18 002 | 18 002 |
| Translation differences | -72 | -193 | -170 |
| Retained earnings | -31 607 | -6 355 | -11 683 |
| Owners of the parent company | -13 597 | 11 534 | 6 229 |
| Non-controlling interests | --301 | -175 | -458 |
| EQUITY | -13 898 | 11 359 | 5 771 |
| NON-CURRENT LIABILITIES | |||
| Finance and lease liabilities | 10 839 | 54 349 | 58 318 |
| Employee benefit obligation | 374 | 400 | 374 |
| Deferred tax liabilities | 253 | 74 | |
| NON-CURRENT LIABILITIES | 11 213 | 55 002 | 58 766 |
| CURRENT LIABILITIES | |||
| Finance and lease liabilities | 43 862 | 5 045 | 5 299 |
| Other current liabilities | 125 965 | 16 974 | 13 125 |
| Income tax liabilities | 177 | 158 | 59 |
| CURRENT LIABILITIES | 70 003 | 22 176 | 18 483 |
| Liabilities | 81 216 | 77 179 | 77 249 |
| EQUITY AND LIABILITIES | 67 318 | 88 538 | 83 019 |
| HLRE Holding Group | |||||
| 2611405-7 | |||||
| Consolidated Statement of Cash Flows, indirect | |||||
| 1000 EUR | 1.8.-31.10.2025 | 1.8.-31.10.2024 | 1.2.-31.10.2025 | 1.2.-31.10.2024 | 1.2.2024-31.1.2025 |
| Cash flows from operating activities | |||||
| PROFIT/LOSS FOR THE PERIOD | -58 | 580 | -5 073 | -2 810 | -8 425 |
| Adjustments to the profit/loss for the period | |||||
| Depreciation, amortisation and impairment | 1 643 | 1 693 | 4 978 | 5 265 | 6 937 |
| Financial income and expenses | 1 182 | 1 149 | 3 855 | 3 435 | 4 995 |
| Tax on income from operations | -275 | 203 | -1 219 | -357 | -1 206 |
| Other adjustments | 385 | -70 | 708 | -944 | -546 |
| Adjustments total | 2 935 | 2 976 | 8 322 | 7 399 | 10 180 |
| Working capital changes | |||||
| Increase / decrease in inventories | 160 | 1 160 | -207 | 918 | 1 569 |
| Increase / decrease in trade and other receivables | 1 892 | -2 025 | -651 | -3 484 | -465 |
| Increase / decrease in trade payables | -957 | 2 050 | 3 084 | 3 506 | 1 478 |
| Interest paid | -656 | -387 | -1 353 | -1 216 | -1 628 |
| Interest received | 17 | 39 | 40 | 116 | 155 |
| Other financial items | -13 | -115 | -24 | -2 482 | -2 477 |
| Income taxes paid | -136 | -89 | 215 | -329 | -239 |
| Net cash from operating activities | 3 184 | 4 189 | 4 353 | 1 618 | 148 |
| Cash flows from investing activities | |||||
| Purchase of tangible and intangible assets | -209 | -144 | -533 | -427 | -614 |
| Proceeds from sale of tangible and intangible assets | 124 | 20 | 1 018 | 648 | 412 |
| Acquisition of subsidiaries, net of cash acquired | 0 | 0 | 0 | -2 | -2 |
| Purchase of investments | 0 | 0 | -3 | 0 | 0 |
| Loans granted | 0 | 0 | 0 | -1 | -1 |
| Proceeds from repayments of loans | 2 | 3 | 8 | 11 | 13 |
| Addition / deduction of cash equivalents | 32 | -19 | 17 | -16 | 0 |
| Net cash used in investing activities | -51 | -140 | 507 | 213 | -191 |
| Cash flows from financing activities | |||||
| Purchase of treasury shares | 0 | -2 | 0 | -20 | 0 |
| Proceeds from current borrowings | 1 000 | 0 | 1000 | 976 | 976 |
| Payment of short-term loans | -325 | 0 | -976 | 0 | 0 |
| Proceeds from non-current borrowings | 0 | 0 | 0 | 3 066 | 3 066 |
| Payment of lease liabilities | -1 319 | -634 | -3 581 | -3 302 | -4 074 |
| Net cash used in financing activities | -644 | -636 | -3 557 | 720 | -32 |
| Net change in cash and cash equivalents | 2 489 | 3 413 | 1 303 | 2 551 | -75 |
| Cash and cash equivalents, opening amount | 1 341 | 1 712 | 2 498 | 2 574 | 2 574 |
| Net increase/decrease in cash and cash equivalents | 2 489 | 3 413 | 1 303 | 2 551 | -75 |
| Effects of exchange rate fluctuations on cash held | 35 | 0 | 64 | 0 | 0 |
| Cash and cash equivalents | 3 865 | 5 125 | 3 865 | 5 125 | 2 498 |
| HLRE Holding Group | |||||||
| 2611405-7 | |||||||
| Consolidated Statement of Changes in Equity | |||||||
| Attributable to owners of the Company | |||||||
| 1000 EUR | Share capital | Reserve for invested unrestricted equity | Translation differences | Retained earnings | Total | Non-controlling interests | Total equity |
| EQUITY 1.2.2024 | 80 | 18 002 | -140 | -3 599 | 14343 | -91 | 14 252 |
| Comprehensive income | |||||||
| Profit/loss for the period | -2 681 | -2681 | -129 | -2 810 | |||
| Other comprehensive income: | |||||||
| Translation differences | 0 | 0 | -55 | 0 | -55 | -5 | -60 |
| TOTAL COMPREHENSIVE INCOME | 0 | 0 | -55 | -2 681 | -2736 | -134 | -2 870 |
| Transactions with owners | |||||||
| Acquisition of treasury shares | 0 | 0 | 0 | -22 | -22 | 0 | -22 |
| Total transactions with owners | 0 | 0 | 0 | -22 | -22 | 0 | -22 |
| Changes in ownership interests in subsidiaries | |||||||
| Changes in ownership interest without loss of control | -52 | -52 | 50 | -2 | |||
| TOTAL EQUITY 31.10.2024 | 80 | 18 002 | -195 | -6 354 | 11 533 | -175 | 11 359 |
| Attributable to owners of the Company | |||||||
| 1000 EUR | Share capital | Reserve for invested unrestricted equity | Translation differences | Retained earnings | Total | Non-controlling interests | Total equity |
| EQUITY 1.2.2025 | 80 | 18 002 | -170 | -11 683 | 6 229 | -458 | 5 771 |
| Comprehensive income | |||||||
| Profit/loss for the period | -19 920 | -19920 | 147 | -19 773 | |||
| Other comprehensive income: | |||||||
| Translation differences | 0 | 0 | 97 | 97 | 10 | 107 | |
| TOTAL COMPREHENSIVE INCOME | 0 | 0 | 97 | -19 920 | -19823 | 157 | -19 666 |
| Other changes | 0 | 0 | 0 | -4 | -4 | 0 | -4 |
| Total transactions with owners | 0 | 0 | 0 | -4 | -4 | 0 | -4 |
| Changes in ownership interests in subsidiaries | |||||||
| TOTAL EQUITY 31.10.2025 | 80 | 18 002 | -72 | -31 607 | -13598 | -301 | -13 899 |
Notes to the consolidated Financial Statements
1) Reporting entity
This consolidated Interim Financial Statement is the Financial Statement for the Group, which consists of a Finnish public limited company operating under Finnish law, with business ID 2611405-7 (hereinafter “HLRE Holding”, “Company”, or “parent company”) and its subsidiaries, collectively referred to as “HLRE”, “HLRE Group” or “Group”. The parent company’s domicile is Pirkkala, and its registered address is Jasperintie 273, FI-33960 Pirkkala, Finland.
2) Basis of preparation
These consolidated Interim Financial Statements do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS and accordingly, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements. The accounting policies applied are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the financial year ended January 31, 2025.
The consolidated financial statements are presented as thousands of euros, unless otherwise specified, and the numbers are rounded off to the nearest thousand. Because of this, the sum of individual figures can deviate from the reported total.
The company’s auditors have not reviewed this Interim Report.
The management has assessed the Company's ability to continue its operations as a going concern for the foreseeable future. In making this assessment, the Company's management has prepared forecasts for revenues, operating costs, and investments for the next twelve months. The forecasts are based on the assumption that the structural reorganization carried out in Finland in 2024 and continuing in 2025 has aligned the organization with demand.
As of 31 October 2025, the Company's cash and cash equivalents amounted to EUR 3.9 million. The management believes that the current cash balance is adequate to cover the Company's operational costs and investment plans for the next twelve months.
Looking ahead, the Company anticipates the improved profitability and cash flow for the next quarter. Despite the inherent uncertainties, the management remains confident in the Company's ability to navigate challenges and capitalize on opportunities.
Taking into account the aforementioned factors and considerations, the financial statements have been prepared on a going concern basis. The management will continue to closely monitor the Company's financial performance and adapt its strategies as necessary to ensure long-term sustainability and growth.
3) Seasonality of operations
The Group operates in an industry that sees major seasonal changes. In a typical year, the second and third quarter together amount major share of the Group’s full-year EBITDA.
Management has reacted to seasonal changes in customer volumes and demand for roof, roof product and underground drain renovations through workforce adjustment and structural changes in business area management and sales functions in Finland.
4) Segment information and revenue
The Board of Directors of HLRE Holding is the Group’s chief operating decision maker, and operating segments have been specified based on the information reviewed by the Board of Directors in order to allocate resources and assess the profitability of business operations. The Board of Directors manages the HLRE Group as a single integrated business aggregate, and therefore HLRE has a single operating and reportable segment.
The revenue of the HLRE Holding Group is primarily generated by roofing, roof product and underground drain renovations for single-family homes and housing companies pursuant to the service concept developed by the Company, as well as project and direct sales of rainwater systems and roof safety products. The entire service chain – product development, manufacturing, sales and installation – is managed in-house by the Group.
The HLRE Holding Group is operating in Finland and Sweden. Small-scale out of total Q1-Q3 revenue was generated by direct sales of rainwater systems and roof safety products from Vesivek Tuotteet Oy in Finland to Baltic countries and Sweden. The Swedish turnover was generated by roofing and roof product installations and small-scale by direct sales of rainwater systems and roof safety products:
| Breakdown of revenue by country | |||
| 1000 EUR | Feb 25 – Oct 25 Q1-Q3 |
Feb 24 – Oct 24 Q1-Q3 |
Feb 24– Jan 25 Q1-Q4 |
| Finland | 59 512 | 62 932 | 81 539 |
| Sweden | 18 143 | 15 873 | 20 797 |
| Baltic countries | 611 | 490 | 593 |
| Total | 78 266 | 79 295 | 102 929 |
5) Goodwill impairment testing
The impairment test concerning Group’s assets was made at the end of October and as a result write down of goodwill with EUR 14.7 million is booked in Q3 Interim Report. Write down is allocated to CGU1 (cash generating unit), which consist mostly of roof installation business in Finland. The Group published a press release for the impairment test in the beginning of December.
Determining the recoverable amount of a cash-generating unit is based on value in use calculations, which require the use of estimates. The calculations use cash flow projections based on budgets and estimates approved by the management for a five-year period. The cash flow projections are based on the Group’s actual results and the management’s best estimates of future sales, development of costs, general market conditions and applicable tax rates. The years after the projected period are extrapolated using a growth estimate of 2%. The estimated future net cash flows are discounted to their present value when estimating the recoverable amount based on the pre-tax weighted average cost of capital. The weighted average cost of capital illustrates the current market view of the time value of money and risks associated with the tested units.
The market environment for roof renovations in Finland (CGU 1) has been challenging during the financial year under review, as was the case in the preceding financial year. For the Company, this was reflected in subdued consumer demand, with necessary renovations being postponed. Based on updated valuations, the recoverable amount of a cash-generating unit for CGU1 has decreased by EUR 22.7 million from the valuation made at the end of last financial year (January 2025). Despite the fact that carrying value of assets has been decreased as well, the updated valuation lead to the write down of goodwill with EUR 14.7 million for CGU1.
The discount rate after taxes was updated to 8,3 %. At the end of last financial year (January 2025), the discount rate used was 8,7 %.
The table below presents the allocation of goodwill to the Group’s cash-generating units:
|
Thousands of euros |
31.10.2025 |
31.1.2025 |
|
Installation of roof and rainwater systems and drainage business in Finland CGU1 |
15 703 |
30 403 |
|
Production of rainwater management systems and roof safety products CGU2 |
4 870 |
4 870 |
6) Financial liabilities
The Group announced in January 2024 that it had concluded the negotiations with the majority holder of the bond on the terms and conditions for extending the bond, while at the same time announcing that, as the maturity of the outstanding bonds, being 12 February 2024, was approaching, it will request for a one-month extension to finalize the terms and conditions. On 5 February 2024, the Group announced that the majority of the bondholders had approved the one-month extension. In February 2024, the Group continued to finalize the terms and conditions of the bond, announcing on 8 March 2024 the extension of the three-year SEK 300 million bond and the registration of the bond with Nasdaq Stockholm on 13 March 2024.
The bond falls due for payment on 12 February 2027. The terms and conditions include an interest premium of 7.85% for the deferral of the payment dates between 12 February 2024 and 12 May 2025 until the loan maturity date. The updated terms and conditions also include the option after 12 May 2025 to postpone 30% of the 7.85% interest premium until the loan maturity date. The Group used the option and postponed 30 % of the interest premium both during 13 May 2025 – 12 August 2025 and during 13 August 2025 – 12 November 2025.
In addition, a five-year convertible loan of EUR 3 million was issued by the Company’s principal shareholders and around EUR 66 thousand to minor shareholders. The principal of the convertible bond is subject to a fixed annual interest rate of 8.00%. The accrued interest shall be paid on the maturity date of the loan or on the conversion date specified separately in the agreement, whichever earlier, subject to certain conditions. Until then, all accrued interest will remain as debt, but the accrued interest will not be added to the loan principal and will not accrue interest.
The updated terms and conditions of the bond include the new leverage (net debt / EBITDA) covenant starting Q3 interim report. The covenant will be 5.0 until January 2026, 4.5 between February 2026 and July 2026, and 4.0 from August 2026 until the loan maturity date in February 2027. The updated terms and conditions also include a liquidity covenant of EUR 2 million.
The Group did not meet the leverage covenant criteria at the end of October and has informed the breach for the bond agent and bond investors.
| Maturities of contracts of financial liabilities 31 October 2025 | ||||||
| 1000 EUR | No more than 12 months | Over 1 year and no more than 2 years | Over 2 years and no more than 5 years | Over 5 years | Total | Book value |
| Trade payables | 6 425 | 6 425 | 6 425 | |||
| Lease liabilities | 4 352 | 4 003 | 3 841 | 12 197 | 11 102 | |
| Bonds | 35 361 | 35 361 | 31 343 | |||
| Convertible bonds | 4 653 | 4 653 | 3 663 | |||
| Shareholder loans | 19 084 | 19 084 | 16 670 | |||
| Revolving credit facility (RCF) loan | 1 085 | 1 085 | 1 000 | |||
| 66 307 | 4 003 | 8 494 | 0 | 78 806 | 70 203 | |
| Maturities of contracts of financial liabilities 31 January 2025 | ||||||
| 1000 EUR | No more than 12 months | Over 1 year and no more than 2 years | Over 2 years and no more than 5 years | Over 5 years | Total | Book value |
| Trade payables | 4 941 | 4 941 | 4 941 | |||
| Lease liabilities | 4 792 | 3 935 | 5 956 | 121 | 14 804 | 14 007 |
| Bonds | 1 663 | 2 691 | 32 011 | 36 365 | 28 767 | |
| Convertible bonds | 4 296 | 4 296 | 3 287 | |||
| Shareholder loans | 18 146 | 18 146 | 16 581 | |||
| Loans from financial institutions | 976 | 976 | 976 | |||
| 12 372 | 6 626 | 60 409 | 121 | 79 528 | 68 559 | |
7) Commitments and contingent liabilities
The following shares have been pledged as collateral for the bond and overdraft facility:
- HLRE Group Oy, Vesivek Ltd, Vesivek Sverige AB and Vesivek Tuotteet Ltd (formerly Nesco Ltd).
Furthermore, the following internal loans have been pledged as collateral for the bond agreement:
- Loan granted by HLRE Holding Ltd to HLRE Group Ltd amounted to EUR 19,696,333
- Loan granted by HLRE Holding Ltd to Vesivek Ltd amounted to EUR 1,234,960
- Loan granted by HLRE Holding Ltd to Nesco Invest Ltd amounted to EUR 8,446.710
- Loan granted by HLRE Holding Ltd to Vesivek Tuotteet Ltd amounted to EUR 4,510,442
The following business mortgages have been confirmed and pledged as collateral for the bond and overdraft facility:
- HLRE Group Ltd, amounted to EUR 57 200 000
- Vesivek Ltd, amounted to EUR 57 200 000
- Nesco Invest Ltd, amounted to EUR 57 200 000
- Vesivek Tuotteet Ltd, amounted to EUR 57 200 000
- Vesivek Sverige AB amounted to SEK 20 000 000
The following real estate mortgages have been pledged as collateral for the bond and overdraft facility:
- Vesivek Tuotteet Ltd, Orimattila production plant, amounted to EUR 13 673 208.
8) Use of Alternative Performance Measures
Alternative Performance Measures (APM) are financial measures of historical or future financial performance, financial position, or cash flows, other than financial measures defined or specified in the applicable financial reporting framework. HLRE Group reports the financial measures [Gross profit], [Gross margin] and [Adjusted EBITDA] in its quarterly reports, which are not financial measures as defined in IFRS. The Group believes that the alternative performance measures provide significant additional information on HLRE’s results of operations, financial position and cash flows The APMs are used consistently over time and accompanied by comparatives for the previous periods.
- Gross profit= Revenues – cost of goods sold
- Gross margin (%) = Gross profit in relation to Revenue
- EBITDA = Operating profit (EBIT) + Depreciation + Amortization
- EBITDA % = EBITDA in relation to Revenue
- Adjusted EBITDA = EBITDA - EBITDA Adjustments
- Adjusted EBITDA % = (EBITDA - EBITDA Adjustments) / Revenue
- Operating profit (EBIT) % = Operating profit in relation to Revenue
- EBITDA adjustments = One-offs regarding restructuring costs and other non-recurring costs
9) Events after the Reporting Date
At the end of October, Vesivek Tuotteet Ltd, part of the HLRE Holding Group, announced that it will initiate change negotiations concerning personnel. The basis for the change negotiations was the anticipated slowdown in demand during the upcoming winter season, due to both seasonality and the current market situation. The aim of the negotiations was to adjust current resourcing to the reduced sales volume. The negotiations began on 3 November 2025 and concerned all personnel of Vesivek Tuotteet Ltd. As a result of the negotiations, the number of employees will be reduced by seven. In addition, it was decided in the negotiations to implement temporary layoffs for all personnel during the period from 5 December 2025 to 26 April 2026. The layoffs will affect up to 64 people.The personnel changes are estimated to generate total annual savings of approximately EUR 0.7 million for the group. These measures are a response to declining market demand and aim to maintain financial profitability.
In November HLRE Holding Oyj (the "Company") instructed the agent for the Company's senior secured bonds (ISIN SE0015530712) (the "Bonds"), Nordic Trustee & Agency AB (publ) (the “Agent”), to initiate a written procedure to request that bondholders vote in favour an amendment to the terms and conditions of the Bonds. The largest holder of the Company’s bonds, holding approximately 66 2/3 per cent of the outstanding nominal amount of the Bonds, indicated its support for the amendment. The amendment is to ensure that the Company and its other group companies have sufficient liquidity to finance their operations in the upcoming period. The Issuer requested in the written procedure the holders of the Bonds to approve that the terms and conditions of the Bonds are amended, so that the interest payable on 12 November 2025 would be postponed, so that such interest would be paid on 12 May 2026 instead. No deferred interest will accrue on the postponed interest payment. The Agent delivered the notice of the written procedure to all bondholders on 6 November 2025. The written procedure will end on 2 December 2025.
HLRE Holding Oyj (the "Company") informed at the end of November the agent for the Company's senior secured bonds (ISIN SE0015530712) (the "Bonds"), Nordic Trustee & Agency AB (publ) (the “Agent”), that it expects to breach the Net Interest Bearing Debt to EBITDA maintenance financial covenant under the terms and conditions of the Bonds for the relevant period that ended on 31 October 2025 (the "Anticipated Breach"). The Company deliver the related Compliance Certificate where the financial covenants are reported to the Agent, for the period between 1 February 2025 and 31 October 2024 during the week 49 in the beginning December 2025. The financial position of the Company and its group companies have been challenging for some time. Consequently, the Company has commenced negotiations with the largest holder of the Bonds to improve the financial situation of the Company. In order to obtain the consent of the holders of the Bonds to such measures, the Company will request the Agent to launch a written procedure, or to convene a bondholders' meeting, immediately once the proposed measures have been agreed. The Company plans to request for a waiver in respect of the Anticipated Breach as part of such measures.