Zehnder Group (ZEHN) investor relations material

Strategic transformation and market positioning

• Ventilation now represents 66% of total sales, up from 45% seven years ago, reflecting a shift from hydronic components to integrated HVAC and climate solutions, with a focus on heat and energy recovery ventilation.

• The company has transitioned from a component supplier to a climate solutions provider, leading in innovative ventilation and setting industry standards with a comprehensive portfolio and strong life-cycle service offerings.

• Geographic focus remains on Europe and North America, with targeted expansion in growth markets such as Poland, Spain, and the U.S. (notably California and Texas), leveraging regulatory trends and lifestyle positioning.

• Ongoing consolidation strategy through bolt-on acquisitions, such as SEBER in Spain, Lifebreath in Canada, Airia, Caladair, and Siber, to strengthen market presence and technology portfolio.

• Maintains top-tier market presence in key European countries, with a phased approach to US market leadership and continued Canadian dominance.

Market drivers and growth levers

• Regulatory changes, such as near-zero energy building standards and mandatory ventilation in regions like California and Canada, are accelerating demand for advanced ventilation and climate solutions.

• Increasing awareness of indoor air quality, health, and energy efficiency, along with trends in remote work and aging populations, drive market growth.

• Renovation and replacement markets are gaining importance as new build activity fluctuates, with tailored products and campaigns targeting these segments.

• Service and digital value-added offerings, including proactive filter replacement, monitoring, and lifecycle management, are expanding to capture recurring revenue and customer loyalty.

• Training and education initiatives, with 25,000 annual trainings and expanding academies, support market adoption and address skilled labor shortages.

Financial performance and guidance

• First half of 2024 saw double-digit growth in ventilation, with sales reaching $328.4 million and EBIT rising to €32.7 million, while HY1 2025 sales grew 11% to €382.8M, net profit up 229% to €23.5M, and adjusted EBIT up 45% to €32.7M.

• EBIT margin improved to 8.5% in H1 2024, with 2025 sales guidance of €740–770 million and adjusted EBIT margin expected at ~8.5%, in line with HY1 2025 performance.

• Over the last five years, €180M invested in M&A and €118M returned to shareholders, with a strong balance sheet and low leverage (<0.2x net debt/EBITDA as of June 2025).

• Long-term targets include 4–5% annual sales growth, 9–11% EBIT margin, and a return on capital invested above 20%, supported by a shift to asset-light, service-oriented business.

• Capital allocation prioritizes organic growth, innovation, and bolt-on acquisitions, balanced with a dividend payout of 30–50% of net income.