NIBE Industrier’s shares climbed over 8% on Tuesday after the Swedish heating group posted a second-quarter profit that exceeded expectations, driven by a recovery in operating margins despite ongoing pressure from U.S.-Canada trade tariffs.
The company reported a 7.6% increase in net sales to 10.85 billion Swedish crowns, up from 10.08 billion a year earlier. Operating profit rose 30% to 1.23 billion crowns, while net profit surged 52% to 753 million crowns. Earnings per share increased to 0.37 crowns from 0.24 crowns in the same period last year.
Operating margin expanded to 11.4% from 9.4%, marking the sixth consecutive quarter of profitability improvement. The Components division, which supplies the semiconductor and heat pump industries, reported an 8.9% operating margin, up from 6.6%, supported by demand tied to electrification trends. Net sales in the division reached 3.12 billion crowns.
The largest division, which includes heat pumps and hydronic systems, posted a 13.8% operating margin, exceeding the prior year’s 12.3%. Net sales in this segment totaled 7.33 billion crowns. Management maintained its full-year operating margin guidance for this division within the 13-15% range.
The Stoves division, however, remained loss-making with an operating margin of minus 3.5%, an improvement from minus 7.5% a year ago. The segment continues to face headwinds from U.S.-Canada trade tariffs, which have reduced annual operating profit by approximately 150 million crowns. The company now views its earlier target of achieving a 10-13% margin in 2026 as "very difficult to achieve," revising near-term expectations to a 6-8% range.
Net debt declined to 17.98 billion crowns from 20.19 billion a year earlier, while the net debt-to-EBITDA ratio improved to 2.7 times from 3.2 times. The equity-to-assets ratio stood at 46.8% as of June 30, up from 44.0%.
Chief Executive Gerteric Lindquist noted that the company anticipates a stronger second half compared with the first, adding that the traditional seasonal pattern "has been re-established."
