Ad hoc announcement: Swiss Zehnder Group Significant increase in sales and profitability in first half of 2021

The sales achieved by the Zehnder Group (SIX: ZEHN), a leading international provider of complete solutions for a healthy indoor climate, grew by 23 % to EUR 348.8 million in the first half of 2021, with the operating result (EBIT) rising from EUR 17.5 million in the same period of the previous year to EUR 37.7 million. As a result, the EBIT margin increased by a considerable 4.7 percentage points to 10.8 %. Net profit was EUR 33.0 million (previous year: EUR 12.7 million). The Zehnder Group is in exclusive negotiations concerning the acquisition of a majority share in French ventilation company Caladair.

Consistently high demand for our products and systems for a healthy indoor climate

In the first half of 2021, the Zehnder Group increased its sales by 23 % (+24 % organically1) to EUR 348.8 million (previous year: EUR 283.9 million). Both business areas experienced positive growth. Ventilation sales rose by 15 % (+16 % organically) to EUR 182.5 million (previous year: EUR 158.9 million), while radiator revenues grew 33% (+35% organically) to EUR 166.3 million (previous year: EUR 125.0 million). 52 % of total sales were attributable to the ventilation business area and 48 % to the radiator business area (previous year: 56 % and 44 % respectively).

The Europe segment achieved sales of EUR 298.6 million (previous year: EUR 239.9 million), which equates to growth of 24 % (+25 % organically). All of the Zehnder Group’s major markets had a part to play in this increase.

In the China & North America segment, sales rose by 14 % (+16 % organically) to EUR 50.2 million (previous year: EUR 43.9 million).

High demand and continued focus on costs led to higher margins

The operating result (EBIT) in the first half of 2021 rose to EUR 37.7 million (previous year: EUR 17.5 million). Of this, the Europe segment contributed EUR 34.1 million (previous year: EUR 14.3 million) and the China & North America segment EUR 3.7 million (previous year: EUR 3.2 million). This resulted in a remarkable 4.7 percentage point increase in the EBIT margin to 10.8% (previous year: 6.2 %).

The Group continued to pursue a systematic strategy of optimising costs and improving efficiency. Additionally, significant restrictions on business travel and events being run in a digital format had a positive impact on the cost base during the first six months of 2021. However, profitability is still being hampered by rising purchase prices, affecting steel and electronics in particular. This was particularly evident during the second quarter and sales price increases were only able to compensate for it to an extent. As well as this, supply bottlenecks affecting certain suppliers increasingly led to long waiting times and disruptions in the production and supply chain. Expenditure on product development and innovation was increased in order to develop new products and bring them to the market more rapidly.

Income tax was affected by factors including the use of loss carry-forwards and positive effects of the tax reform measures introduced in Switzerland. Net profit came out at EUR 33.0 million (previous year: EUR 12.7 million).

Continued investment with a focus on ventilation growth

In the first half of 2021, the Zehnder Group invested EUR 9.2 million (previous year: EUR 9.1 million) in property, plant and equipment and intangible assets. Of this, a figure of EUR 8.2 million (previous year: EUR 7.4 million) was invested in the Europe segment. In April, construction started on the new training and office building – called the Center of Climate – at the Lahr (Germany) site. Capacity for heat exchanger production was expanded in both Waalwijk (Netherlands) and Reinsdorf (Germany). In the China & North America segment, investments worth EUR 1.1 million (previous year: EUR 1.7 million) were made.

Expenditure on research and development amounted to EUR 10.3 million during the first half of 2021 (previous year: EUR 8.6 million), with two-thirds focusing on the ventilation business area.

The acquisition of a 51% share in Chinese company Zhongshan Fortuneway Environmental Technology Co., Ltd. was successfully completed at the end of April 2021. Acquiring this rapidly growing business operating in the area of enthalpy exchangers has increased the number of staff by 176.

Solid balance sheet with high equity ratio

Cash flow from operating activities amounted to EUR 42.1 million in the reporting period (previous year: EUR 40.6 million). At the end of June 2021, there was a net liquidity1 amount of EUR 110.7 million (previous year: EUR 51.3 million). Equity amounted to EUR 343.5 million (previous year: EUR 307.7 million), equating to a consistently high equity ratio of 65% (previous year: 64%). As part of the share buyback programme for the purpose of capital reduction, 79300 registered shares A had been bought back by June 30, 2021 at a total price of EUR 5.6 million.

Exclusive negotiations concerning the acquisition of a majority share in ventilation company Caladair

The Zehnder Group is in exclusive negotiations concerning the possible acquisition of a majority share in French company Caladair. Founded in 1979 and headquartered in the Burgundy region, the company develops, manufactures and sells energy-efficient ventilation and thermodynamic systems for better indoor air quality and greater climate comfort. At present, these solutions are primarily still used in commercial buildings. With 80 employees, the company achieved sales of around EUR 10 million in 2020.

Through the planned acquisition, the Zehnder Group is intending to expand its ventilation product portfolio to include large-scale units for commercial buildings and multi-family houses – a strategically important sector. The intention is for Caladair to continue operating at its current location under the management of the current owner and managing director, who will retain a minority share.

Information about the outcome of the negotiations will be communicated in the coming months.

Positive outlook for the year as a whole subject to uncertainties

The Zehnder Group believes that the coronavirus situation will continue to normalise over the coming months, and is anticipating a positive order situation. However, the outlook for the year as a whole remains uncertain and there are still risks at play, including the strained supply chain, significant material price increases and recovery effects levelling off. Growth is expected to weaken in the second half of the year and margin pressure to increase. For the year as a whole, the Zehnder Group is anticipating sales of EUR 680–720 million and an EBIT margin of around 10%.

It is continuing to pursue its medium-term goals of average annual sales growth of 5 % and an EBIT margin of 8–10 %.

The 2021 Six-month Report is available on our website at:

The Zehnder Group improves quality of life with comprehensive indoor climate solutions. The globally active company develops and manufactures its products in 17 plants, including 3 in China and 3 in 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 business areas with brands such as Zehnder, Runtal, Acova, Bisque, Greenwood, Paul, Core, Fortuneway, Enervent and Recair.

The Zehnder Group has had its headquarters in Gränichen (Switzerland) since 1895. It employs around 3300 people worldwide and achieved sales of EUR 618 million in 2020. 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.