Nibe and Ariston: Heat pumps are coming out of a tough year
The roller coaster ride of the heat pump market appears to be stabilizing.
Italian Ariston and Swedish Nibe are leading European players in the water heating and heat pump market.
In terms of revenue Ariston and Nibe’s Climate solutions segment (excluding the two other segments) are roughly the same size.
Last year was difficult for both companies. However the fourth quarter proved to be better than the beginning of the year. Their revenue decline slowed down and profitability improved.
I mean, when you take a hit, of course, as we've done, all numbers become extraordinary. I think that's a major explanation because we had a very decent setup, you know, ’23. Demand was phenomenal and we could hardly keep up with demand until the fourth quarter. So then, of course, all the stars were aligned. And then we were hit with this drop in demand. And we were hit, you know, very hard when it comes to the cost structure. We didn't have time to align ourselves to the immediate bad demand. At the same time, we had to also plan for the future. -Eric Lindqvist, CEO of NIBE
Ariston
A family-controlled manufacturer of water heaters, heat pumps and components, listed in the Milan stock exchange.
Q4 comments:
Weak demand mainly in Germany, France and Italy; negative heating as expected, especially Heat Pumps.
Growing markets: Eastern Europe, UK, Austria, Belgium.
In 2023 Ariston acquired CENTROTEC Climate Systems, including Wolf heat pumps. The acquisition took place in the midst of the boom, and Ariston paid approximately one billion euros partly in cash and partly in its own shares. In 2021, the acquired entity registered revenue of €599 million and €84.8 million adjusted EBITDA.
For 2025 Ariston expects flat or slightly increasing revenue and sligtly increasing EBIT-margin.
And given Germany is 20% of our revenue, if we give a guidance of 0% to 3%, you might understand which kind of development we see. In terms of the heating heat pump percentage that you calculated, we normally don't give the split of one heating solution. I said before that is around 15%, all included in terms of mid-digit renewables. -Maurizio Brusadelli
NIBE Industrier
A founder led and owned manufacturer of heating products, stoves and components, listed in Stockholm.
Nibe’s Climate solutions segment performed worse than Ariston in 2024 in terms of revenue.
Ariston’s EBIT margin was 6.1% in 2024. Although Nibe’s operating margin nearly halved, it still posted a margin of 9.3%.
Climate Solution is very much a reflection of what we said initially here, that the demand has been pretty good on the heat pump. But we, the manufacturers, including ourselves, have not really seen that because the inventories, they've been digested by the distribution chain. The exception might be Germany. -Eric Lindquist
Q4 comments of Climate Solutions:
We expect a gradual improvement in sales going forward.
Our ambition is to be back at an operating margin level, within our historical range, during 2025.
Acceptable inventory levels in the distribution chains in most markets, except Germany where another quarter of adjustments might be needed.
Nibe does not provide guidance for 2025.