Weak first quarter
Large reductions in inventories at
distributors, continued high interest rates and unusually low level
of housing production – gradual improvement in demand expected in
the second half of the
year.
- Sales decreased by 18.5% to SEK 9,494 (11,646)
million
- Adjusted operating profit amounted to SEK 516 (1,755)
million
- Adjusted profit after net financial items amounted to SEK
184 (1,654) million
- Earnings per share adjusted for items affecting
comparability amounted to SEK 0.02 (0.63)
- Review of total costs as a result of weak demand in the
European heat pump market at the beginning of 2024 – action plan
underway
”Demand remained weak in the first three
months of 2024 due to an unfortunate combination of a number of
adverse factors. Consequently, we are currently in the process
of implementing the action plan initiated on February 16 this
year,” says Gerteric Lindquist, Managing Director and CEO of
NIBE.
Clear reasonsIn Europe, work has
been underway since the end of 2023 to return to more normal
inventory levels at distributors, particularly for heat pumps, but
also stoves. This means that orders received by manufacturers have
been unusually low and do not correspond to the number of products
delivered and installed at end customers. For example, the European
heat pump manufacturing market has almost halved in the year to
date.
The appreciable and relatively rapid rise in
interest rates has resulted in a sharp slowdown in new housing
production, which in turn has significantly reduced demand for both
heat pumps and stoves. The high interest rate level has also
contributed to general restraint in consumer spending.
Unlike in North America, where political
decision-making has resulted in a robust, long-term incentive
program for transition to fossil-free climate control, political
decision-making in Europe on replacing fossil fuels with
sustainable alternatives such as heat pumps is not as strong. The
subsidy application process is often complicated and the date for
ceasing use of fossil fuels in existing properties is up to 20
years in the future in some countries. At the same time, the price
difference between gas and electricity in terms of price per kWh is
disproportionately large, to the detriment of
electricity.Action plan underwayWe are now
implementing measures to reduce personnel and other fixed costs,
and also to reduce inventories and balance investments to adjust to
the current lower sales volumes. At the same time, we are striving
to create optimal conditions for a suitably sized and efficient
organization once demand starts to recover.
The action plan will result in annual savings
corresponding to around SEK 750 million, which will take full
effect from 2025 onwards. The costs of the action plan are
estimated at around SEK 1,095 million, which burdened results in
the first quarter.
OutlookIn the short term, the
ongoing inventory adjustments at distributors are expected to be
largely completed in the second quarter of this year. Demand at the
manufacturing level should therefore gradually improve in the
second half of the year. In addition, clear indications of interest
rate cuts should contribute positively to a gradual improvement in
the economic situation.
We have long been convinced of the future growth
potential to be found in the transition to a fossil-free society
and reduced carbon dioxide emissions. With our company philosophy
and our strong product range, we are well positioned in this
market.
Four years ago, we established a proactive
investment program worth SEK 10 billion to further reinforce our
market position by enabling even faster product development and to
safeguard increased production capacity. The majority of this
program has now been completed, which will create favorable
conditions for future growth opportunities, which we assess to be
good.
“We will take all steps necessary to manage
the current difficult situation, and will do so in a responsible
manner. As is our habit, and based on experience, we remain
optimistic about our long-term performance, despite the situation
this year being particularly difficult to predict,” says Gerteric
Lindquist.
Press informationA media and
analysts webcast (in English) will take place today at 11:00 AM
(CEST) with CEO Gerteric Lindquist and CFO Hans Backman. NB:
Registration on our website www.nibe.com is required in
order to participate in the conference and to obtain a code to be
able to ask questions.
For more information: Gerteric Lindquist, CEO,
and Hans Backman, CFO: +46 (0)433 27 30 00
NIBE Industrier AB (publ) is required to disclose
the information in this press release under the EU’s Market Abuse
Regulation and the Swedish Securities Market Act. This information
was submitted by the contact persons above for publication
on May 16, 2024 at 8:00 AM (CEST).
NIBE Group – an international organization with
companies and a presence worldwideNIBE Group is an international
organization that contributes to a lower carbon footprint and
better utilization of energy. In our three business areas – Climate
Solutions, Element and Stoves – we develop, manufacture and market
a wide range of environmentally friendly, energy-efficient
solutions for indoor climate comfort in all types of properties,
plus components and solutions for intelligent heating and control
in industry and infrastructure.Since its beginnings in the town of
Markaryd in the Swedish province of Småland more than 70 years ago,
NIBE has grown into an international company with an average of
22,500 (21,300) employees and an international presence. From
the very start, the company has been driven by a strong culture of
entrepreneurship and a passion for corporate responsibility. Its
success factors are long-term investments in sustainable product
development and strategic acquisitions. Combined, these factors
have brought about strong, targeted growth, which generated sales
of just under SEK 47 (40) billion in 2023. NIBE has been
listed under the name NIBE Industrier AB on the Nasdaq Nordic Large
Cap list since 1997, with a secondary listing on the SIX Swiss
Exchange since 2011.
Nibe Industrier AB (TG:NJB)
Historical Stock Chart
From Oct 2024 to Nov 2024
Nibe Industrier AB (TG:NJB)
Historical Stock Chart
From Nov 2023 to Nov 2024
