Zehnder Group (ZEHN) H2 2024 earnings summary

Executive summary

• 2024 was a challenging year with contracting markets in new build and renovation, but ventilation sales stabilized and grew modestly in the second half, especially in North America and select European markets.

• Strategic actions included divesting non-core activities, closing radiator plants, and acquiring Siber in Spain and a stake in Caladair to strengthen the portfolio and geographic footprint.

• Service and clean air solutions businesses grew, now representing 15% and 10% of ventilation sales, respectively, supporting revenue stability.

• Transformation efforts included digitalization, centralizing sales, shifting to a regional model in Europe, and advancing the transition to indoor climate solutions.

• Resilient performance despite geopolitical and economic headwinds, with structural measures stabilizing EBIT.

Financial highlights

• Group sales declined by 7% year-over-year to EUR 705.8 million, with a net loss of EUR -2.4 million due to one-off costs and high tax rates.

• Adjusted EBIT was EUR 50.1 million (7.1% of sales), down 21% year-over-year.

• Operating cash flow reached EUR 60.6 million (8.6% of sales), with significant investment activities including the Siber acquisition.

• Double-digit adjusted EBITDA margin of 10.9% was maintained despite sales decline.

• Proposed dividend of CHF 1 per share, down from CHF 1.3 last year, supported by strong cash flow.

Outlook and guidance

• No precise 2025 outlook provided due to ongoing uncertainties; guidance will be updated at half-year results if visibility improves.

• Focus remains on growth in Southern Europe, North America, and Eastern Europe, with continued transformation from component manufacturer to solution provider.

• Mid-term targets include 5% sales CAGR, 9-11% EBIT margin, and ROCE above 20%.

• Initiatives for 2025 include finalizing plant consolidation, accelerating digitalization, and launching new products.

• Service, maintenance, and replacement business expansion is a key priority.