Swedish heating and ventilation group NIBE Industrier AB saw its shares jump more than 8% on Friday after reporting a sharp recovery in margins and a 7.6% rise in second-quarter net sales.
The company posted operating profit of 1.23 billion Swedish crowns, up from 944 million crowns a year earlier, while operating margin widened to 11.4% from 9.4%. Net profit rose to 753 million crowns, compared with 494 million crowns in the same period last year. Earnings per share increased to 0.37 crowns from 0.24 crowns.
Net sales totaled 10.85 billion crowns, a 7.6% increase year-on-year, though currency effects from a stronger Swedish krona reduced reported sales by 161 million crowns. Organic growth, adjusted for exchange rates, reached 8.7%. Net financial items improved by 37 million crowns, driven by higher net interest income.
Net debt fell to 17.98 billion crowns from 20.19 billion crowns a year earlier, while the net debt-to-EBITDA ratio improved to 2.7 times from 3.2 times. The equity-to-assets ratio rose to 46.8% from 44.0%.
Within its divisions, the largest segment reported an operating margin of 13.8%, up from 12.3%, with net sales of 7.33 billion crowns. The company expects its full-year operating margin to remain "well within" its 13-15% target range. The components division, which supplies semiconductor and heat pump industries, saw margins expand to 8.9% from 6.6%, with sales of 3.12 billion crowns. Demand from electrification trends supported growth.
The stoves division remained loss-making, with an operating margin of minus 3.5%, improving from minus 7.5%. Losses were driven by tariffs between the United States and Canada, which weighed on three Canadian operations. The annual negative impact of tariffs on operating profit was estimated at 150 million crowns. NIBE revised its long-term margin guidance, stating that achieving a 10-13% margin by 2026 "must now be considered very difficult," with a more realistic near-term range of 6-8%.
Chief Executive Gerteric Lindquist noted that demand for single-family home heat pumps in Europe with hydronic systems continued to grow, while commercial HVAC markets expanded in both Europe and the United States. U.S. residential heat pump demand declined following the removal of tax subsidies, though the drop was less severe than anticipated. Lindquist added that the company expects a stronger second half compared with the first, with the traditional seasonal pattern "re-established."
