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Zehnder Group AG / Key word(s): Forecast/Half Year Results
Gränichen (CH), 27 July 2022: In the first half of 2022, Zehnder Group (SIX: ZEHN), a leading international provider of complete solutions for a healthy indoor climate, increased its sales to EUR 399.6 million. Rising manufacturing costs and supply bottlenecks weighed on profitability. With an operating result (EBIT) of EUR 36.9 million and a net profit of EUR 29.4 million, the Group nevertheless achieved solid results.
Acquisitions strengthen ventilation sales
In the first half of 2022, the Zehnder Group increased its sales by 15% (5% organically) to EUR 399.6 million. 55% of sales were in the ventilation segment and 45% were in the radiator segment. This means that the share of ventilation sales in the Group’s total sales increased by an additional 3 percentage points as compared to the same period in the previous year.
In the ventilation segment, sales increased to EUR 219.9 million. The lack of electronic components severely limited the ability to supply ventilation. With the contributions of the recently acquired companies, the Group still managed to grow ventilation sales by 20% (4% organically).
The radiator segment recorded sales of EUR 179.8 million, which equates to a growth of 8% (7% organically). After the high order backlog related to the pandemic led to strong sales in the previous year, demand normalised in the first half of 2022.
Operating margin within communicated range
The operating result (EBIT) for the first six months of 2022 amounted to EUR 36.9 million and was therefore 2% below the value of the same period in the previous year. The EBIT margin fell by 1.6 percentage points to 9.2%. The war in Ukraine and the global supply chain issues have led to further increases in material, transport and operating costs. Due to extended delivery times, these will be passed on to the customers with a time delay. In this challenging environment, the Zehnder Group is pursuing a proactive pricing policy and a differentiated approach to cost management. Spending on strategically important business activities such as research and development, marketing and sales, and digital transformation has been increased. At the same time, the Group is continuing its consistent pursuit of cost optimisation and efficiency improvements in every area.
The tax rate, which was reduced in previous years by positive one-off effects, normalised in the reporting period to 21% (previous year: 12%). Net profit came out at EUR 29.4 million (previous year: EUR 33.0 million).
Investment in infrastructure, innovation and market coverage
In the first half of 2022, the Zehnder Group invested EUR 11.4 million (previous year: EUR 9.2 million) in property, plant and equipment and intangible assets. In Lahr (DE), the new “Center of Climate” is taking shape. This centre for a healthy indoor climate includes training rooms and practical workshops, an exhibition space, meeting and conference rooms, office space and a restaurant as a meeting place for customers, partners and employees. The move into the centre is scheduled for the beginning of 2023.
Expenditure on research and development increased by 14% to EUR 11.8 million during the first half of 2022. A large part of this flowed into the ventilation segment. Due to the current challenges in terms of deliveries and in order not to jeopardise market success, some product launches have been postponed. Nevertheless, Zehnder’s innovative strength received recognition. At the VSK in Utrecht, the largest Dutch trade fair for heating, sanitary and air conditioning technology, the product combination of Zehnder ComfoClime & Thermal Shield was awarded the VSK Award 2022 in the Health and Comfort category.
In the first six months of 2022, the Zehnder Group continued its acquisition activities and invested EUR 61.7 million (previous year: EUR 2.3 million) in subsidiaries. In February, the Canadian ventilation company Airia Brands Inc. based in London (province of Ontario) joined the Group. In April, the Group also acquired Filtech, a long-standing supplier of high-quality air filters headquartered in the Netherlands.
Net liquidity despite high investment activity
The cash flow from operating activities in the first half of 2022 fell to EUR 11.6 million (previous year: EUR 42.1 million). The reasons for this are primarily due to the increase in trade accounts receivable associated with the growth in sales and the build-up of inventories. During the same period, the Zehnder Group invested in subsidiaries, bought back its own shares and paid dividends for the 2021 financial year, among other things. As a result, net liquidity as at the end of June 2022 decreased to EUR 23.3 million (previous year: EUR 110.7 million). Equity amounted to EUR 325.4 million (previous year: EUR 343.5 million). This equates to another high equity ratio of 58% (previous year: 65%).
Target of an EBIT margin of 8–10% for the year 2022 as a whole confirmed
Procurement, manufacturing and logistics are likely to continue to be affected by the war in Ukraine, geopolitical tensions and the ongoing pandemic in the coming months. Further price and interest rate increases could cause customers to postpone or even cancel construction projects. In this environment, the Zehnder Group considers a temporary weakening of the market over the medium term to be the likely scenario. Over the long term, the outlook remains positive. Zehnder Group’s product range is ideally designed to meet the growing demand for sustainable, healthy and comfortable buildings.
The Zehnder Group expects above-average sales growth in the second half of 2022 as well, thanks to the acquisitions and price increases. It will counter the increasing pressure on margins with a consistent, proactive approach to cost management. For the year as a whole, the Group is targeting sales of EUR 775–825 million and an EBIT margin within the communicated range of 8–10%.
The complete Six-month Report 2022 is available on our website at:
 For alternative performance measures, please refer to the Six-month Report 2022.
Next dates to note
This media release is published in German and English. The German version is binding. For further information about the Zehnder Group, please visit www.zehndergroup.com.
The Zehnder Group improves quality of life with comprehensive indoor climate solutions. The globally active company develops and manufactures its products in its own plants in Europe, China and North America. Its sales activities, spanning more than 70 countries, take place through local sales companies and representative offices.
Zehnder Group products and systems for heating and cooling, comfortable indoor ventilation and air cleaning are characterised by outstanding design and high energy efficiency. The Group is among the market and technology leaders in its segments with brands such as Zehnder, Acova and Core.
The Zehnder Group has had its headquarters in Gränichen (CH) since 1895. It employs around 4,000 people worldwide and achieved sales of EUR 697 million in 2021. The company is listed on the SIX Swiss Exchange (symbol ZEHN/number 27 653 461). The unlisted registered shares B are held by the Zehnder family and persons closely associated with them.
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Zehnder Group AG
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