European industry faces its defining challenges – are we ready to seize the opportunities ahead?
After several challenging years, marked by global debates on energy independence, critical infrastructure, and sustainable development, it is clear as we approach the end of 2025 that electrification and digital transformation are far more than mere buzzwords or passing trends. They have become the foundation of a new economic paradigm. This trend is strongly supported by International Energy Agency (IEA) data, showing that global electricity demand is accelerating at an unprecedented pace. Their analysis positions China as the frontrunner in the electrification race, while Europe continues to grapple with significant challenges – from insufficient domestic production of key components to slow progress in grid modernization, which delays projects and drives up costs.
IEA also warns that global electricity consumption is projected to grow by nearly 4% annually by 2027, with continued growth expected beyond that. At the same time, the increasing share of renewables makes power infrastructures more vulnerable, primarily due to aging, deterioration, and undercapacity. Without large-scale investments in grid modernization, system flexibility, and energy storage solutions, Europe will struggle to ensure reliable supply. Regulatory and administrative barriers remain among the most critical obstacles to the green transition. While it is often assumed that these challenges are unique to Croatia and the region, the reality is that across Europe we face lengthy permitting processes, complex procedures, and inconsistent standards that significantly slow down electrification projects. As an industry and as a society, we are still waiting for harmonized rules, streamlined procedures, and clear incentives for infrastructure and innovation investments.
The answer to these challenges lies, among other things, in strengthening European industry – expanding production capacities and accelerating digitalization, from smart grids to advanced energy management systems. Strategic partnerships, investments in research and development, and modernization of manufacturing facilities are essential to increase output and reduce dependence on imports. At the same time, attracting and retaining top talent is just as critical as technology itself – because transformation cannot happen without people.
In this context, Croatia’s industry has a strong and competitive representative in KONČAR Group, which for the sixth consecutive year has delivered record financial results and historic business and development milestones. Encouragingly, results for the first nine months of this year reinforce optimism for continued growth. Sales revenues for products and services are up 24.5% compared to the same period in 2024, while net profit exceeded €167 million – an increase of nearly 44%. Equally important, order intake continued to outpace deliveries, while our backlog reached €2.32 billion by the end of September. Despite a challenging environment that demands swift and decisive action, with focus, continuity, and strong support for Europe’s green and digital transition, we expect to close 2025 with results that significantly surpass last year’s achievements and this year’s targets.
Exports remain dominant, accounting for more than 70% of total sales revenues, while KONČAR’s market capitalization underscores the scale and seriousness of our growth. It is worth recalling that at the start of 2020, KONČAR’s share price stood at around €84, dropping below €60 during the COVID period. This year, the price at one point reached €720 – twelve times higher than during the pandemic. Likewise, market capitalization grew from €216 million at the beginning of 2020 to €1.7 billion by the end of Q3 this year.
These results are primarily the outcome of capital investments in R&D, production and scientific capacities, state-of-the-art equipment, and the professional and personal development of our people. Over the past years, we have firmly established ourselves as a regional leader and one of Europe’s most influential high-tech manufacturers driving the green transition. Through continued development of innovative products, strengthening internal capacities, and strategic acquisitions, we plan to maintain a strong growth trajectory across all business segments. Our focus remains on further internationalization and building a strong position among leading IT companies in the region. Developing digital solutions for critical infrastructure is not something just anyone can do – it requires decades of investment in domain expertise, experience, and technological excellence. Thanks to this foundation, recent acquisitions, and substantial investments in the digital segment, KONČAR is enhancing its competencies and opening access to new markets, reaffirming its position as a key industry player. Our solutions deliver added value and differentiation on the global stage, particularly in an era of growing security risks, cyber threats, and the need for dual-use technologies.
2026 could well be the year that reveals whether European industry is ready to successfully meet current challenges and pass the test posed by accelerated electrification. This socio-economic transformation is not merely a technological challenge, but a strategic priority that demands bold and decisive action: expanding capacities, accelerating digitalization, and forging strong partnerships. Only by acting now can Europe maintain its competitiveness and ensure a more effective energy transition. With a clear strategic framework and secured capacities, we believe KONČAR is well positioned to contribute significantly to this goal and to play a prominent role in the transformation of the global power sector in the years ahead.
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