Management Report
Sales growth and improved profitability
Dear shareholders,
In the first half of 2026, Zehnder Group achieved further sales growth on the back of the strong ventilation segment. In Europe, we continued to grow our ventilation sales overall, while in North America we benefited from targeted expansion of our ventilation business. The general increase in the share of ventilation sales combined with efficiency improvements contributed to a higher operating margin, which increased the adjusted operating result at a faster rate than sales. By contrast, in the radiator segment, sales and the operating result remained under pressure despite the measures implemented.
Our innovation and market launch initiatives in Europe delivered positive results in the ventilation business. The share of sales generated by the Zehnder EVO product line for multi-family homes in Europe continued to increase, supported by product launches in additional countries. The planned development of our US business also progressed further during the first half of the year as we expanded into additional states and secured new projects, strengthening our overall presence in this key market.
Geopolitical tensions in the Middle East led to increased volatility in the energy and raw materials markets. Thanks to disciplined cost management, the impact on our business has so far remained limited.
In June 2026, we took the next steps in developing our organisational and management structures. Going forward, our European ventilation and radiator activities will be managed as separate divisions, each with its own profit and loss responsibility. This divisional structure will enable us to capitalise more effectively on the specific potential of each market, shorten decision-making processes, and tailor our segment strategies more precisely.
Although market conditions remain challenging in certain regions, we are encouraged by the progress in our ventilation business, our growing internationalisation, and our organisational realignment. We will continue to execute our strategy with consistency and focus, and remain committed to profitable growth and the sustainable enhancement of corporate value.
Ventilation business drives sales and earnings of the Group
Zehnder Group’s sales increased by 3% (organically +4%1) to EUR 394.9 million in the first half of 2026 (previous year: EUR 382.8 million). The ventilation segment made a significant contribution to this sales growth. The increase in sales was driven by our targeted market expansion in Europe and North America. In North America, however, strong growth in local currency was partially offset by negative exchange rate effects. By contrast, the radiator segment continued to be affected by price pressure and subdued demand, resulting in a slight decline in sales in this segment in the first half of 2026.
In the first half of 2026, Zehnder Group achieved an operating result (EBIT) of EUR 32.2 million (–1%; previous year: EUR 32.7 million) and an EBIT margin of 8.2% (previous year: 8.5%). Higher sales in the ventilation segment and disciplined cost management helped improve the adjusted EBIT1 (before one-off costs) to EUR 37.7 million (previous year: EUR 32.7 million), with a margin of 9.5% (previous year: 8.5%). This represents an increase of 100 basis points compared with the previous year. The one-off costs arose in connection with the introduction of a divisional organisation in Europe and amounted to EUR 5.5 million in the reporting period.
At EUR 12.6 million, research and development expenditure in the first half of 2026 was in line with the previous year’s figure of EUR 12.7 million. Of this, around 78% was attributable to the ventilation segment. Net profit for the first half of 2026 increased by 2% to EUR 23.9 million (previous year: EUR 23.5 million). The tax rate at Group level was 25% in the reporting period (previous year: 22%).
1For more information, see: Alternative performance measures.
Positive sales momentum in the ventilation business
The ventilation segment achieved a 7% increase in sales (organically +8%) to EUR 272.1 million in the first half of 2026 (previous year: EUR 254.1 million). This segment now accounts for 69% of total sales (previous year: 66%). The positive sales development encompassed all areas of the ventilation segment, from residential ventilation and Clean Air Solutions to heat exchangers.
In the EMEA region (Europe, Middle East and Africa), the ventilation segment generated sales of EUR 220.5 million, representing an increase of 7% compared with the same period of the previous year (previous year: EUR 205.7 million; organically +7%). Performance varied across individual countries. In the growth markets of the Netherlands, Spain, and the Czech Republic, Zehnder achieved organic sales growth. Business in Germany also developed positively despite the continued decline in new construction activity. By contrast, sales in the United Kingdom were below the previous year’s level, reflecting a slowdown in new construction activity caused by temporary delays in planning approval processes.
Sales in the ventilation segment in the North America region rose by 12% to EUR 42.1 million (previous year: EUR 37.5 million; organically +18%). The strong growth achieved in the USA and Canada was driven by gains in market share, the targeted expansion of the sales network, and the consistent execution of our growth strategy.
Sales in the Asia-Pacific region decreased by 13% to EUR 9.5 million (previous year: EUR 10.9 million). New construction activity in China remained weak in the first half of 2026. This is primarily due to a high level of vacant apartments and continued subdued demand for home ownership.
Improved earnings in the ventilation business
In the ventilation segment, adjusted EBIT1 grew by 13% to EUR 37.8 million in the first half of 2026 (previous year: EUR 33.3 million), resulting in an adjusted EBIT margin1 of 13.9% (previous year: 13.1%). One-off costs in connection with the introduction of a divisional organisation in Europe amounted to EUR 3.8 million. EBIT stood at EUR 34.0 million (previous year: EUR 33.3 million), resulting in an EBIT margin of 12.5% (previous year: 13.1%). The higher sales and sales volume were the main driver of the margin improvement.
1For more information, see: Alternative performance measures.
Stabilisation of radiator volumes in Europe
The radiator segment recorded sales of EUR 122.7 million in the first half of the year (previous year: EUR 128.7 million), representing a decline of 5% (organically –3%).
In the EMEA region (Europe, Middle East and Africa), sales in the radiator segment amounted to EUR 104.5 million, remaining broadly in line with the previous year (previous year: EUR 105.8 million). Performance varied across markets. France, the United Kingdom, and Italy recorded declines in sales, primarily due to general uncertainty and competition from lower-priced radiator models. By contrast, Germany, the Netherlands, and Switzerland achieved sales growth.
In the North America region, total sales in the radiator segment amounted to EUR 17.1 million, a decrease of 17% (previous year: EUR 20.7 million, organically –10%).
The Asia-Pacific region once again recorded a demand-driven decline in sales in the first half of 2026 to EUR 1.1 million (previous year: EUR 2.2 million).
Optimisation measures for radiators are taking effect, but profitability remains under pressure
In the radiator segment, adjusted EBIT1 amounted to EUR –0.1 million in the first half of 2026 (previous year: EUR –0.7 million), corresponding to an adjusted EBIT margin1 of –0.1%. EBIT was EUR –1.8 million (previous year: EUR –0.7 million), resulting in a margin of –1.4%. One-off costs in connection with the introduction of a divisional organisation in Europe amounted to EUR 1.6 million. Profitability in the radiator segment continued to be affected by persistent price pressure and a shift toward lower-priced models. The optimisation and cost-reduction measures implemented are beginning to show positive results, but did not yet achieve their full effect during the reporting period.
1For more information, see: Alternative performance measures.
Lower cash flow from operating activities and increased net liquidity
Cash flow from operating activities decreased to EUR 5.1 million in the first half of 2026 (previous year: EUR 22.9 million). The decline was primarily driven by a strategic build-up of inventory to ensure uninterrupted delivery capabilities amidst ongoing supply chain volatility and higher accounts receivables from customers due to sales growth in ventilation. In the first half of 2026, Zehnder Group invested EUR 9.4 million in property, plant and equipment (previous year: EUR 7.5 million).
Dividends totalling EUR 16.9 million were paid out in the first half of 2026 (previous year: EUR 11.8 million). Net liquidity1 as at the end of June 2026 amounted to EUR 11.9 million (previous year: net debt1 of EUR 12.6 million). Equity totalled EUR 276.0 million (previous year: EUR 244.5 million), corresponding to an equity ratio of 56% (previous year: 51%).
1For more information, see: Alternative performance measures.
Divisionalisation as the foundation for greater focus and accountability
With the planned introduction of a divisional organisational structure in Europe on 1 October 2026, Zehnder Group is aligning its European operations more closely with the distinct requirements of the ventilation and radiator markets. The business areas, which have until now been closely interlinked, will be organisationally separated and operated with full profit and loss responsibility. The new structure will shorten decision-making processes, enhance customer proximity, and allow for a stronger focus on the specific market and competitive dynamics of each business. At the same time, the Group Executive Committee will be streamlined and aligned to the largest business areas. This divisionalisation will provide the framework for Zehnder Group to focus on more consistent execution of its strategy, greater operational agility, and sustainable efficiency improvements.
New Zehnder Academies opened
In the first half of 2026, Zehnder opened three new academies in the USA (Hampton, New Hampshire), the United Kingdom (Camberley), and Norway (Voyenenga), as well as an experience centre in the Netherlands (Zwolle). The facilities strengthen the direct transfer of knowledge to customers, planners, installers, and other market participants – enhancing expertise in energy-efficient indoor climate solutions. Strong demand for training programmes and the positive response to the new locations underline their strategic importance as platforms for customer engagement, brand building, and sustainable support for future growth.
Outlook for full-year 2026
The number of residential building permits issued across Europe increased overall during the first half of the year. However, actual construction activity continues to lag behind and remains at a relatively low level. In particular, higher construction costs and interest rates resulting from global macroeconomic uncertainty and geopolitical tensions, continue to weigh on construction activity. This volatile economic environment coupled with ongoing political uncertainties – particularly in the Middle East – may lead to further cost-related pressures.
We expect the renovation markets to stabilise over the remainder of 2026, accompanied by a continued gradual recovery in new buildings. Market dynamics are likely to vary by region, with modest overall growth but no broad-based market recovery yet. Energy efficiency, increasingly stringent building regulations, and healthy living environments remain the strongest structural drivers in the industry.
For the 2026 financial year as a whole, Zehnder Group therefore expects sales of between EUR 770 million and EUR 790 million and an adjusted EBIT margin1 approximately at the level of the first six months. As a result of the introduction of a divisional organisation in Europe, one-off costs in the range of approximately EUR 10 million are expected in the 2026 fiscal year.
The expansion of our offering for renovation and apartment building projects, the Clean Air Solutions business, and the growing importance of the service business are expected to provide additional growth momentum. On this basis, the Group confirms its medium-term targets of average annual sales growth of around 5% and an adjusted EBIT margin1 of between 9 and 11%.
1For more information, see: Alternative performance measures.
Thank you to our stakeholders
We would like to express our sincere thanks to our employees, whose commitment and expertise make a vital contribution to our success.
We would also like to thank our customers, suppliers, and business partners for their trust and enduring partnership of collaboration.
Finally, we would like to thank you, valued shareholders, for your continued support and confidence in the future of Zehnder Group.
Yours sincerely,
Hans-Peter Zehnder
Chairman of the Board of Directors
Matthias Huenerwadel
Chairman of the Group Executive Committee, CEO
The expectations presented in the Management Report are based on assumptions. Should these prove to be inaccurate, the associated results will also change.