Hanon Systems' Hybrid Strategy Delivers Strong 2025 Financials

SEOUL, South Korea – February 02, 2026 – Hanon Systems, a global leader in automotive thermal management, announced a significant financial turnaround for fiscal year 2025, posting annual revenue of KRW 10.88 trillion. The 8.9% year-on-year growth, coupled with a robust operating profit of KRW 271.8 billion, signals a successful strategic pivot that balances the uncertain pace of vehicle electrification with sustained profitability from traditional powertrains. The results are the first to reflect a full year of operational adjustments following its acquisition by Hankook & Company Group in January 2025.

A Turnaround Forged by Discipline

The strong 2025 performance marks a notable recovery from the headwinds faced in 2024, a year that ended with a significant net loss attributed to restructuring costs and a temporary slowdown in the EV market. In contrast, 2025 was defined by stabilization and a sharp focus on profitability. Company-wide efficiency initiatives, implemented under its new parent company, were credited as the primary driver behind the improved bottom line.

A key indicator of this newfound discipline is the company’s operating margin, which remained above 3.4% for both the third and fourth quarters. This sustained profitability was supported by a cost of sales ratio that was kept below 90% for two consecutive quarters, a clear sign of enhanced operational efficiency and cost control. These metrics demonstrate a fundamental strengthening of the company’s financial health.

Further bolstering its financial structure, Hanon Systems reported that net interest expenses decreased by KRW 28.8 billion year-on-year. The company also anticipates that a recent capital increase will continue to alleviate the financial burden of interest costs, providing greater flexibility for future investment and growth. This disciplined approach to financial management appears to be a core tenet of the strategy implemented following the Hankook & Company Group acquisition, which aimed to enhance financial structures and instill a culture of accountability.

The 'Hybrid Play': Navigating a Shifting Automotive Landscape

While many suppliers have been singularly focused on a rapid transition to electric vehicles, Hanon Systems is executing a more nuanced and pragmatic strategy. Electrified vehicles accounted for a substantial 28% of its total revenue in 2025, underscoring its solid position in the future of mobility. However, the company’s financial release acknowledges a crucial market reality: the global automotive market's transition to electrification is “lagging behind expectations.”

In response, Hanon Systems is strategically leveraging its extensive portfolio to maximize profitability from its core internal combustion engine (ICE) and hybrid electric vehicle (HEV) products. These segments continue to command a strong market presence in many regions, providing a stable and profitable foundation for the company. This dual-pronged approach allows the firm to capitalize on the durable demand for traditional and hybrid vehicles while simultaneously investing in and leading the development of next-generation thermal solutions for the growing EV sector.

This strategic flexibility is a direct result of its comprehensive product portfolio, which is one of the most diverse in the industry. Hanon Systems develops and supplies critical thermal management solutions for nearly every powertrain type, including ICE, HEV, battery electric vehicles (BEV), extended-range electric vehicles (EREV), and even fuel cell electric vehicles (FCEV). This makes the company an indispensable partner for global automakers who are themselves navigating a complex and varied product roadmap.

Technological Leadership Across Powertrains

At the heart of Hanon Systems' market resilience is its deep technological expertise in thermal management—a critical but often overlooked field essential for the safety, performance, and efficiency of every modern vehicle. As the world's second-largest supplier in the sector, its innovations are foundational to the automotive industry's evolution.

In the burgeoning EV market, its contributions are paramount. Sophisticated thermal management systems are vital for optimizing battery performance, enabling faster charging speeds, extending driving range, and ensuring passenger comfort. Hanon Systems has established early technological leadership with advanced solutions like integrated heat pump systems, which dramatically improve EV energy efficiency, especially in colder climates.

Simultaneously, its technology remains crucial for ICE and HEV models. For these vehicles, efficient thermal management helps reduce emissions, improve fuel economy, and enhance overall powertrain performance. By continuing to innovate across all platforms, Hanon Systems ensures its relevance and leadership regardless of which direction the market shifts, solidifying its role as a key enabler of automotive advancement.

A Global Footprint and a Forward-Looking Vision

Building on the momentum of 2025, Hanon Systems plans to continue its focus on cost structure improvements and profitability recovery. The company is also committed to expanding its global reach and diversifying its customer base, which already includes most of the world's major automakers.

The press release highlighted ongoing efforts to strengthen existing partnerships while securing new OEM customers, with a particular focus on the dynamic Asian market. This global strategy, supported by 50 manufacturing sites and three regional innovation centers across 21 countries, provides a robust platform for growth.

Lee Soo-il, Vice Chairman and CEO of Hanon Systems, affirmed this forward-looking strategy. "Despite ongoing global uncertainty, we remain committed to strengthening our fundamental business structure, fostering corporate culture innovation, and achieving operational stability alongside Hankook & Company Group," he stated. "This year, we will accelerate growth by reinforcing operational discipline, strengthening our R&D capabilities, and pursuing new business opportunities leveraging our thermal management expertise." This clear vision, backed by a year of proven results, positions Hanon Systems to not only navigate the complexities of the automotive transition but to thrive within it.