Nibe seeks savings after heat pump slump
17th February 2024
SWEDEN: Swedish manufacturer Nibe has announced plans to streamline its business after latest financial figures confirm declines in the European heat pump market.
While Nibe recorded a good performance overall in 2023, with sales rising by 16.4% to SEK46,649m (€4,138m), the company reported large fluctuations in demand and a clear decline in the European heat pump market in the second half of the year.
With evidence of continuing weak demand in the first few weeks of 2024, Nibe has implemented a programme to reduce staff and other fixed costs as well as reduction of inventories and balancing of investment.
The programme, which is expected to bring annual savings of around SEK600m (€53.2m), primarily aims to streamline the full organisation and will, among other things, affect around 500 employees.
Analysis by the European Heat Pump Association (EHPA) at the end of last year, revealed a slump in sales in many European and Nordic countries in 2023. This was echoed by the German heating association, BDH, last month, which reported an “alarming” downturn in heat pump sales.
Discussing Nibe’s latest figures, MD and CEO Gerteric Lindquist said: “Demand varied greatly in 2023, both throughout the year and between different markets and market segments. We saw a clear decline in the European heat pump market in particular towards the end of the year,” .
Nibe has echoed the concerns of others that political uncertainty over future subsidies in several European countries are having a negative impact on sales.
It is also affected by the rise in interest rates resulting in a sharp drop in new residential construction. In Nibe’s home country, Sweden, new housing output is down to its lowest level since the banking crisis in the early 1990s.
“As energy prices fell and manufacturers’ delivery capacity improved, after the half-year mark it became clear that distributors’ heat pump inventories had grown too large in relation to actual customer demand,” Nibe says in a statement on its website. “Since then, inventory adjustments have been carried out in order to restore a more proportionate balance between manufacturers, distributors and end-consumers, and these adjustments are expected to continue for at least another two quarters and maybe for the rest of the year.”
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