Zehnder Group (ZEHN) H1 2024 earnings summary

Executive summary

• Sales declined 15% year-over-year to EUR 344.7 million in H1 2024, mainly due to a persistent market slump in key regions like Germany and France, and a significant backlog effect from 2022 into 2023.

• EBIT before one-off effects dropped from 9.6% to 6.6% (EUR 22.6 million), with operational EBIT at EUR 12.5 million (3.6%) after EUR 10 million in one-off effects from divestments and restructuring.

• Net profit fell sharply to EUR 7.1 million from EUR 27.7 million in the prior year period.

• Strategic investments continued in product innovation, market coverage, and the acquisition of Siber in Spain, despite the challenging environment.

• Cost reduction programs and headcount reductions (about 350 FTEs in 12 months) were implemented to adapt to lower volumes.

Financial highlights

• Sales fell 15% year-over-year to EUR 344.7 million, with ventilation down 17% and radiator down 13%.

• EBIT before one-off effects was EUR 22.6 million (6.6% margin), down 42% year-over-year; after one-offs, EBIT was EUR 12.5 million (3.6% margin).

• Operating cash flow was EUR 14.3 million in H1; net liquidity increased to EUR 53 million despite dividend payments and acquisitions.

• Equity ratio remained strong at 68% at end of June.

• EBITDA before one-off effects decreased 31% to EUR 35.3 million; reported EBITDA was EUR 25.2 million.

Outlook and guidance

• 2024 is expected to be a transition year, with sales guidance between EUR 670–700 million, substantially below last year.

• EBIT margin before one-off effects is anticipated to remain at a comparable level to H1 (6–7%).

• No significant recovery in new construction or renovation markets anticipated before year-end; further cost-saving measures are planned, but strategic investments will continue.

• Medium- and long-term outlook remains positive due to strong underlying trends in healthy, sustainable buildings and regulatory-driven demand.