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Nibe seeks savings after heat pump slump

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.”

Related stories:

German groups warn of “alarming” slump in heat pump sales23 January 2024
GERMANY: As Germany celebrates record heat pump sales in 2023, the future of the market is uncertain with sales declining since last June and an “alarming” slump in December. Read more…

Heat pump sales declining in Euro/Nordic countries – 14 December 2023
BELGIUM: Despite a strong start, heat pumps sales have shrunk in some European and Nordic countries this year, according to new data from the European Heat Pump Association (EHPA). Read more…

Daikin to axe 500 jobs as heat pump demand falls – 21 September 2023
BELGIUM: Daikin Europe has said it will not renew the contracts of 500 temporary employees at its plant in Ostend, due to a sharp fall in heat pump sales. Read more…

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