Gränichen (Switzerland), 17 January 2020 – The Zehnder Group (SIX: ZEHN), a leading international provider of comprehensive solutions for a healthy indoor climate, increased its sales in 2019 by EUR 42.1 million or 7% to EUR 643.9 million (unaudited). The ventilation business in particular made a key contribution to this considerable increase, reporting 13% growth in the business year.
Sales growth for the ventilation and radiator business
In the 2019 business year, the Zehnder Group increased its sales from EUR 601.8 million in the previous year to EUR 643.9 million (unaudited), corresponding to a growth of EUR 42.1 million or 7% (+4% organically[1]). The boost in sales generated by the Group is primarily the result of the successful expansion of the ventilation business, although the radiator business also reported a slight increase again in 2019. The ventilation business experienced a significant increase in sales of 13% (+7% organically), rising to EUR 316.0 million (previous year: EUR 278.9 million). By the year end, the sales generated by this business comprised almost 50% of the Zehnder Group’s total figure (previous year: 46%). Radiator business sales at the end of the year had increased by 2% (+1% organically) compared to the previous year, amounting to EUR 327.9 million (previous year: EUR 323.0 million).
This development in sales is in line with the Zehnder Group’s strategic focus and reflects the impact of the measures it has implemented. In the ventilation business area, the Group aims to reinforce its strong market position by investing in both market and product development. For the radiator business area, which is generally following a downward trend, the Group is pursuing a harvest strategy. In this regard, it is using its strong market position – for example, in the area of towel radiators and multi-column radiators – to secure further market shares.
Europe segment: Positive contribution from acquisition of ventilation companies
Of the total sales, 82% (previous year: 84%), or EUR 531.1 million (previous year: EUR 506.5 million) came from the Europe segment, which recorded an increase in sales of 5% (+2% organically). Sales of EUR 259.0 million (previous year: EUR 231.7 million) were generated in the ventilation business area, equating to growth of 12% in comparison to the previous year (+5% organically). The ventilation business area includes the residential ventilation, clean air solutions and heat exchangers product lines. All three displayed positive growth. Sales in Europe’s radiator business area dropped in 2019 by 1% (-1% organically), amounting to EUR 272.1 million (previous year: EUR 274.9 million). While the radiators product line generated sales at the same level as the previous year, revenues for heating and cooling ceiling systems experienced a decline.
The Zehnder Group’s main markets in Europe reveal a mixed picture. Sales in Germany
increased during the reporting year, with both business areas contributing to this growth. Thanks to the ventilation business, sales also increased in the UK despite uncertainties surrounding Brexit. However, sales in France – where predominantly radiators are sold – experienced a decline. While the Zehnder Group was able to increase its market shares for hot water radiators despite the declining market, it also had to sacrifice some market shares in the case of electric radiators, an important business area in France. Sales also experienced a dip in Switzerland. The increase in the radiator business was unable to compensate for the decline in the area of ventilation. The ventilation area poses a challenge on the Swiss market due to the high proportion of rented flats in new buildings. In order to keep investment costs low, simple extract air solutions are increasingly being favoured over comfort ventilation systems with heat recovery, or comfort systems are being omitted altogether. Positive sales developments were seen in the Zehnder Group’s other important markets, namely the Netherlands, Italy, Belgium, Poland and Finland. The two most recent acquisitions in the ventilation area – Enervent in Finland in September 2018 and Recair in the Netherlands in March 2019 – helped contribute to this encouraging growth.
China and North America segment: Strong sales growth in both regions
The China and North America segment comprised 18% (previous year: 16%) of the consolidated sales in the reporting year, amounting to EUR 112.8 million (previous year: EUR 95.3 million). This equates to a substantial increase of 18% (+15% organically).
In China, sales increased by 13% (+12% organically). This can mainly be attributed to the ventilation business, which currently accounts for just under 80% (previous year: 77%) of China’s sales. Contracts from key developers and, accompanying this, the delivery of ventilation units for large-scale constructions increased in particular. The radiator business recorded significant growth in the first half of 2019 due to the completion of a major project. In the second half of the year, however, the project business lagged behind the previous year’s level, resulting in radiator sales matching those of the previous year by the end of 2019.
In North America, the revenue for 2019 was a substantial 24% higher than in the previous year (+18% organically). Sales in the radiator business area, which continue to contribute around 80% of North America’s sales figure, experienced a significant increase. The cooling solutions business, which was acquired from NuClimate Air Quality Systems, Inc. at the start of 2018, was a contributing factor in this regard. The ventilation business also enjoyed positive results.
The complete financial statement for the Zehnder Group will be published on 26 February 2020.
[1] For alternative performance measures, please refer to the annex to this media release.