Nibe Q1 results. All buildings here in Northern Europe need heat pumps, air-source, geothermal and also solar cells, Nibe has most of it. In addition to that, they also sell other things such as water heaters, electric boilers, ventilation and the like. I think the biggest trigger will be the recovery after the recent demand downturn and the reconstruction of Ukraine (hopefully NIBE will get orders from there too). Nibe is expecting strong demand in the second half of the year.
Nibe as a company has existed for over 70 years and it all started in Markaryd in Småland. Very good history in both management and share price. In recent years, the share has plummeted like never before. Concerns were exaggerated as always. However, many believe strongly in recovery, including me.
I expect either this year or next year to earn 2 SEK in profit per share. PE 20 is reasonable to pay for a company like Nibe. Then the profit will rise by 10-15% per year until the next recession hits. And these come about every 7-8 years. The entire economy goes in cycles. Short cycles and long cycles. That is why the profit has collapsed in Nibe. Temporarily. New construction has stopped and people are holding tight to their wallets. But now things are turning around with higher wages, lower taxes, lower interest rates and a lot of other small incentives. The report this week shows the following for Jan-Mar 2025:
SALES amounted to SEK 9,673 (9,494 million)
EARNINGS per share SEK 0.19 (-0.42)
The operating margin improved from 5.4% in the first quarter of 2024 to 8.1%
Analysts did not agree at all on what to expect from Nibe. Very different opinions from various analysts, simply put, no one knows how Nibe will cope with the recession. Most recently, the CEO said that it started to turn around in January.
My summary, it looks like it is recovering, but profits are still weak. Sales are rising, so that is good. According to the CEO, there will be a slow recovery in the first half of the year and stronger demand in the second half, that’s a natural trend. I can understand that, people are buying more before winter. Sounds reasonable. Quite an okay report and now we’re looking forward to the next one, what the stock will do is impossible to answer, it could go up, it could go down.
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