NIBE will publish its Q3 report on Tuesday, Nov 17, and the earnings webcast can be followed here at 11:00 CET. We expect the report to confirm the sustainable volume-led recovery that gained momentum in the previous quarter, driving solid top-line growth and margin expansion. With management previously pointing to a stronger second half of the year, our focus will be on the continued strength in the Climate Solutions and Element business areas, as well as commentary on the underlying European market dynamics.

Climate Solutions and Element to drive strong top-line growth

We forecast Q3 revenue to grow organically by 8.7% year-on-year to 11,001 MSEK, in line with consensus forecast. We expect the Climate Solutions business area to continue its strong performance, with revenue growing around 9% to 7,327 MSEK. In our view, this segment will continue to benefit from strong European heat pump sales, where Q3 market data points to continued solid momentum across key European markets. We note that Germany stands out, with heat pump subsidy applications up around 58% y/y in January–September and accelerating to 98% y/y in Q3'26, while residential heat pump sales in the Netherlands rose 53% y/y in the quarter. The more mature Nordic markets also grew, largely driven by replacement demand as many heat pumps installed in the 1990s and 2000s now reach the end of their lifespan. In Sweden, demand for heat pumps got an extra boost from the new Villaeffekten scheme (introduced September 1, 2026), which supports energy upgrades rather than ongoing electricity consumption, and from uncertainty about future energy prices. Peers confirm the positive picture, with Carrier’s European heat pump sales rising by about 35% and Ariston continuing to report strong growth, particularly in Germany.

For the Element business area, we anticipate revenue of 3,114 MSEK (11% y/y growth). This is driven by demand from the semiconductor industry, where NIBE acts as a component supplier to North American chipmakers, as well as by increased demand from the heat pump industry and resilient rail and electrification trends. Meanwhile, we expect the market for white goods to remain relatively subdued. While we expect a strong sequential improvement in Stoves, in line with its traditional seasonal pattern, we expect the business area to remain the laggard of the group with an estimated revenue of 820 MSEK (4% y/y), as it continues to be weighed down by a persistently weak European market with consumers in Europe generally cautious about investing in consumer durables.

Margin expansion fueled by higher volumes and capacity utilization

We expect Q3 adjusted EBIT to show a strong increase and reach 1,431 MSEK (Q3'25: 1,139 MSEK), translating to a margin of 13.0% (Q3'25: 11.3%), slightly above consensus forecast. We believe this profitability improvement will be primarily driven by higher sales volumes in Climate Solutions and Element, which should improve capacity utilization and overall productivity. We forecast Climate Solutions to deliver an EBIT of 1,136 MSEK (EBIT-%: 15.5%) and Element to reach 296 MSEK (EBIT-%: 9.5%). However, we anticipate the Stoves segment will continue to face margin pressure, generating an estimated EBIT of only 25 MSEK (EBIT-%: 3%). In our view, Stoves remains burdened by the negative impact of US tariffs introduced earlier in the year, which is challenging to offset in the short term without losing market share. While the company has implemented limited extraordinary price increases in North America ahead of the peak season, they will likely not fully offset the impact of the tariffs.

Focus on H2 momentum and margin trajectory

NIBE does not provide specific numerical financial guidance. However, its management struck a confident tone in the previous quarter, indicating that the traditional seasonal pattern has been re-established and expecting a stronger second half of the year. We will look for commentary confirming that this volume-led margin recovery remains fully on track across the business areas. Key watchpoints include management's updated view on the macroeconomic environment, particularly the sluggish new-build market and any ongoing subsidy uncertainties in certain European heat pump markets. Additionally, as the company's leverage continues to improve alongside profitability, we will monitor any remarks regarding the M&A pipeline and potential bolt-on acquisitions.