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Arbonia annual results 2022 and outlook 2023

Arbonia AG / Key word(s): Annual Results

28-Feb-2023 / 07:00 CET/CEST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

Arbon, 28 February 2023 – The reporting year of Arbonia was characterised by considerable upheavals in both divisions, which increased significantly in the course of the year: 

The 1st half of 2022 was still characterised by stable sales volumes and benefited from the previous year’s high order volumes, among other things. This was despite the fact that a considerable pressure on the margins was already noticeable at that time due to the inflation trend that had set in for all raw materials and energy. The price increases implemented with customers in the 2nd half of 2022 caused margins to improve significantly. As a result, it was possible to reduce the material ratio from 51.4% to 49.4%. 

However, during the 2nd half of 2022, particularly in the 4th quarter, there was a proper slump in orders from wholesalers for stock items such as radiators and standard doors. Economic uncertainties led to significant destocking and a change in ordering behaviour among customers towards short-term ordering. The energy crisis, which persisted throughout the financial year, also burdened the 2nd half of the reporting year with an additional CHF 5.1 million compared to the previous year.

Furthermore, the geopolitical situation resulting from the war in Ukraine impacted the operating activities of both divisions due to the lost volumes and revenues in the affected markets in Eastern Europe.

Arbonia was able to increase revenues in the financial year 2022 by 1.3% to CHF 1'202.1 million; growth was 5.5% without the influence of currency and acquisition effects (organic). EBITDA without one-time effects1 fell from CHF 134.3 million to CHF 112.4 million; with one-time effects, EBITDA reached 108.3 million compared to CHF 124.7 million in the previous year. This corresponds to a reduction in the EBITDA margin (without one-time effects) from 11.3% in the previous year to 9.4%; with one-time effects, the EBITDA margin fell from 10.5% to 9.0%. As a result, EBIT without one-time effects also fell from CHF 67.0 million to CHF 41.4 million; with one-time effects, EBIT fell from CHF 53.3 million to CHF 37.0 million. This corresponds to a decrease in the EBIT margin without one-time effects from 5.6% to 3.4%; with one-time effects, the EBIT margin fell from 4.5% to 3.1%. The Group result with one-time effects (from continuing operations) fell as a result from CHF 27.5 million in the previous year to CHF 20.7 million. Without one-time effects, the Group result fell from CHF 41.1 million to CHF 23.9 million. 

1 Explanations, definitions, and reconciliations for the Alternative Performance Measures are found in the Annual Report 2022 on pages 227 – 231.

The net liquidity position of CHF 93.2 million at the end of the financial year 2021, which was built up from the sale of the Windows Division in the previous year, became a net debt of CHF –184 million in the financial year 2022 as a result of the planned use of funds, which also included the dividend of CHF 21 million and the purchase of treasury shares (CHF 13 million).

The scheduled investments of CHF 149 million realized in the financial year 2022 as well as the early repurchase of the Corporate Center for CHF 25 million, the price- and delivery-related increase in net working capital of CHF 117 million and the purchase price payment for the two acquisitions Joro and Cirelius of around CHF 44 million resulted in a high negative free cash flow of CHF –245.5 million, compared to a free cash flow of CHF 252.7 million in the previous year.

The repurchase of the Corporate Center as well as investments in investment property in Arbon (CH), which are held in an independent company, were financed from free funds and bank lines in the financial year. For 2023 it is planned to finance these properties independently with mortgages and additionally to disclose key figures of the earnings situation and balance sheet structure of the investment properties and the Corporate Center in the reconciliation of the segment information in the consolidated financial statement 2023.

In absolute terms, shareholders’ equity decreased by around CHF 57 million to CHF 988 million, but in relative terms the equity ratio increased from 64.3% to 65.0% by the end of 2022, giving Arbonia a strong equity base.

For the financial year 2022, the still strong balance sheet and the achieved net profit allow an unchanged dividend of CHF 0.30 per registered share (CHF 0.30 for the financial year 2021) to be distributed to shareholders for the fourth consecutive year since the start of dividend payments. This corresponds to a distribution rate of around 108%. For this reason, the Board of Directors will propose to the General Meeting on 21 April 2023 to distribute a cash dividend of CHF 0.30 per registered share for the financial year 2022, half from retained earnings and half, tax-neutral for Swiss shareholders, from capital contribution reserves.

Strategy and development of the Arbonia Group
Both the Heating, Ventilation and Air Conditioning (HVAC) Division and the Doors Division of Arbonia are continuing their independent strategic development and are specifically concentrating their operational measures on the megatrends of energy efficiency, urbanisation, digitisation and automation. Detailed information on the development of both divisions can be found in the respective reports starting on page 9 of the Annual Report.

In the reporting year 2022, the HVAC Division achieved revenue of CHF 646.2 million, 2.5% above the previous year (CHF 630.5 million); adjusted for currency and acquisition effects, revenue was 7.0% above the previous year. This growth was influenced by price effects in all product groups, which had become necessary due to substantial price increases for raw materials and energy, as well as opposing considerable volume declines of sometimes more than 25% for radiators and on the other hand again substantial double-digit volume increases for the growth products. Volumes for growth products such as heat pumps, fan coils and RVU's were still significantly restricted by supply bottlenecks for electronic assemblies.

With EBITDA without one-time effects of CHF 59.2 million, the division was not able to attain the previous year's level of CHF 70.6 million (–16.2%) with this business performance. At CHF 58.6 million, EBITDA with one-time effects was 5.4% below the previous year (CHF 61.9 million). EBIT without one-time effects closed at CHF 25.2 million, also 34.1% below the previous year (CHF 38.2 million), and EBIT with one-time effects closed at CHF 24.6 million, 3.7% below the previous year (CHF 25.5 million).

As a result of the inadequate capacity utilisation of individual production plants, capacities sometimes had to be adjusted; this was primarily achieved by using the available flexibility options. The relocation and closure of the Dutch radiator plant in Tubbergen announced in the financial year 2021 proceeded according to plan and was completed in the 3rd quarter of 2022. The vacated factory is to be sold in the current financial year 2023.

However, the demand for energy-efficient products and solutions remained high in the reporting year, so that growth products such as heat pumps, air handing units and underfloor heating systems still showed high double-digit growth rates. In summer 2022, the new heat pump plant in Opočno (CZ) with a capacity of 15'000 heat pumps per year was therefore able to be completed and put into operation according to plan. The production relocation from the previous location in Dobré (CZ) was carried out successfully while a very high capacity utilisation was ensured at the same time. The planned production capacity for the year 2023 has already been exhausted by the demand of existing customers. The plans for the next capacity expansion to up to 30'000 pieces per year in 2024 are already proceeding at full speed. 

The battery storage based on the ecologically sustainable redox flow technology has also been generating a high demand since its launch in the summer of the reporting year, which is why the production has already been relocated to the existing production plant in Stříbro (CZ).

The Doors Division achieved a revenue growth of 0.2% in the reporting year, from CHF 551.8 million in the previous year to CHF 552.7 million. Adjusted for currency and acquisition effects, the revenue increased by 3.8%. EBITDA without one-time effects grew from CHF 76.3 million in the previous year to CHF 62.2 million (–18.5%). The EBITDA margin was 11.3%. With one-time effects, the division achieved a 22.3% lower EBITDA of CHF 59.2 million (previous year: CHF 76.2 million). EBIT without one-time effects amounted to CHF 27.2 million, compared to CHF 43.3 million in the previous year (–37.0%). With one-time effects, a 44.4% lower EBIT of CHF 24.0 million resulted compared to the previous year (CHF 43.2 million).

In the 1st half of 2022, the standard door business of the Doors Division still benefited from a high order volume from the previous year 2021 and a basically stable development. In the 2nd half of 2022, wholesalers began to reduce inventories sharply and, due to rapid availability and falling prices, order intake decreased in line with demand. This led to volume decreases of 15 – 25% for standard doors in the Doors Division from September 2022. This ordering behaviour on the part of wholesalers is expected to continue at the beginning of 2023.

This decline was less marked in the project business. This led to a shift in the product mix from standard doors to functional doors, which was partially able to offset the decline in trade business. The division used the positive momentum to expand its own project business in Germany and Switzerland and entered further partnerships with hotel chains and housing co-operatives in the reporting year. These partnerships are also a good example of the distribution synergies between the Wood Solutions Business Unit and the Glass Solutions Business Unit making it possible to offer an extensive portfolio of wooden and glass doors. The acquisition in the reporting year of the German company joro türen gmbh, which specialises in the manufacture of special doors for protection against fire, smoke, noise and intruders for large-scale projects, increases access to the project business in Germany and Switzerland.

The Doors Division strengthens its competitive position through a strategic partnership with Griffwerk GmbH. As part of this cooperation, Arbonia is acquiring a minority share (around 17%) in the German specialist for door handles, glass doors and glass fittings. In addition to synergies in sales and the opening up of new market segments, this will enable an integral development of doors and fittings. The investment will be made through Arbonia’s treasury shares acquired in the financial year 2022.

The market for sanitary products suffered a decline in the reporting year. Building owners are currently holding back on renovation work due to price increases as well as the general economic situation. On the other hand, installers are continuing to focus on the more lucrative installation of subsidised heat pumps and their accessories. Since the production of raw glass is very energy-intensive and glass products have therefore become even more expensive, this has had an additional impact on demand.

Intensification of sustainability
With the past financial year, Arbonia has further created the conditions for combining financial and non-financial objectives in its strategy. An important tool for this is a suitable incentive system for the management. For this reason, it has decided to integrate sustainability criteria such as climate protection in the variable compensation of Group Management starting in financial year 2023. 

The existing challenges for the development of the construction industry, such as sharply increased interest rates and the high material costs will not completely disappear in the coming financial year. However, Arbonia has positioned itself well for these demanding times. After all, as the will to stop using fossil fuels increases, so does the demand for energy-efficient products. In Germany, for example, nearly double the number of applications for funding specialist planning and construction support for energy-efficient renovation of residential buildings were submitted in 2022 as in the previous year. 

Experts expect a temporary decline in new construction activity in all relevant European markets in the current year due to increased interest rates and construction costs, especially for single-family homes in solid construction. The market development for multi-family houses is currently expected to remain stable, not least due to government subsidy programmes and increasing rents in the future.

The market for renovation work, particularly in the case of deferrable improvements, has decreased significantly compared to the previous years due to the explosion in construction costs and the general economic situation at the end of 2022, but energy-related renovation work is set for a basically positive development.

In addition, institutional and professional landlords in particular are carrying out energy-efficient renovation in order to decrease ancillary costs for tenants considerably so that they will be able to increase rents at all in the future. Furthermore, the subsidy programme in Germany has now been expanded to energy-efficient renovation instead of new construction as before. Together with the climate targets of the institutional and professional landlords and the extension of CO2 pricing to landlords in general, this should ensure a considerable expansion of renovation activities. This also holds true for the Doors Division, since energy efficiency can be increased here especially by replacing home entrance doors. Furthermore, many doors have since reached the end of their approximately 30-year life cycle and should be replaced. Arbonia therefore continues to expect that a supercycle, in which around 12 million doors were installed and replaced per year (in Germany) the last time after the fall of the Berlin Wall, will reach another peak again in the next few years. 

In particular the high influx of people caused by Russia’s invasion of Ukraine exerts pressure on the already very tense residential market, especially in Germany but also in the neighbouring countries. In Germany, the housing shortage had reached the amount of approximately 700'000 housing units at the end of 2022. There is also the growing demand for 1- to 2-person households, especially in the metropolitan areas, coupled with a continually increasing living space per person. All of this should lead us to expect a fundamentally positive long-term market development for the real-estate market.

The market should be supported in 2023 by the fact that the widespread increase in material prices has stopped and they are already declining again in some cases, and supply bottlenecks have largely disappeared.

Expectations for the financial year 2023
Despite the current uncertainties regarding the development of the construction industry and thus the volumes of stock products, Arbonia expects for the financial year 2023 revenue of CHF ~1.3 billion and an EBITDA margin without one-time effects of ~10%. After the intensive investment phase in future growth of the last few years, EBIT will increase steadily in the coming years and be at a margin of ~4% at the end of 2023 (also before one-time effects). Investments are expected to be in the region of CHF ~90 million. 

The key long-term trends for Arbonia’s strategy remain positive and stable, as confirmed by the high double-digit growth rates for the growth products heat pump, ventilation, underfloor heating, and energy storage. 

Arbonia considers itself well positioned for the expected market development in Europe, which is why the medium-term targets published on the occasion of Capital Markets Day 2021 in October 2021 remain valid.

The detailed reporting can be found in the annual report 2022 in the chapters “Letter to the Shareholders” and “Divisions” as well as “Sustainability Report”; see

Fabienne Zürcher
Head Corporate Communications & Investor Relations
T +41 71 447 45 54

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Arbonia AG

Amriswilerstrasse 50

9320 Arbon



+41 71 447 41 41






SIX Swiss Exchange

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