NIBE Q4'25 preview: Turning up the thermostat on recovery

NIBE will publish its Q4'25 results on Thursday, February 12, 2026, and the earnings presentation can be followed here at 11:00 CET. We expect the report to show that the gradual recovery in sales volumes and margins is progressing in the right direction. While the operating environment remains challenging, particularly in the new-build market, we anticipate that improved demand in key European heat pump markets and effective cost control will support the results. In the Q4 report, we will focus on management's updated commentary on margin targets for 2026.

Revenue growth driven by Climate Solutions recovery

We estimate that NIBE's revenue will increase organically by 3.4% year-on-year to 11.4 BSEK, above consensus forecast. The primary driver for this growth is the Climate Solutions business area, which we expect to generate some 7.5 BSEK in revenue in Q4 (5% y/y growth). We believe this performance is supported by a gradual recovery in European heat pump demand, specifically in the Nordic countries and Central Europe. Available Q4 heat pump sales data in countries such as Germany, Sweden, Poland and Denmark continues to indicate a gradual improvement from the low levels in 2024. We expect the Elements business area to show slight organic growth (2% y/y, 2.9 BSEK), supported by the railway sector and a pick-up in heating. However, we expect the Stoves business area to remain a drag on growth, with estimated Q4 revenue of 1.1 BSEK (-2% y/y) as it continues to suffer from soft consumer demand. Furthermore, we expect currency headwinds from a stronger SEK to continue weighing on the reported figures.

Profitability supported by cost control and volume recovery

We forecast Q4 EBIT to land at ~1.5 BSEK, above consensus, corresponding to an adj. EBIT margin of 12.9% (Q4'24: 10.2%). We anticipate profitability will be supported by increased sales volumes in the Climate Solutions and Element segments, alongside improved productivity and solid operational cost control. However, we expect the Stoves business area to continue facing margin pressure due to lower volumes and the negative impact of tariffs. For FY2025, we forecast EPS of SEK 1.22 and expect NIBE to increase its dividend from SEK 0.30 per share to SEK 0.40 per share, corresponding to a payout ratio roughly in line with its historical range of 30-35% of its earnings.

Focus on 2026 margin targets and market momentum

For 2026, we estimate organic revenue will grow by around 6.5% to 44.1 BSEK, driving a gradual recovery in the adjusted EBIT margin to 11.3%. While leverage has been at a high level, the net debt/EBITDA ratio has been improving, and we expect this trend to continue as profitability recovers, potentially opening the door for a return to NIBE's traditional acquisition-driven growth strategy.

In our view, the investment case is highly dependent on a sustained volume rebound, and in the Q4 report, we will be looking for confirmation that the momentum in European heat pump sales is continuing. In addition, a key point in the Q4 report will be management's updated commentary on margin targets for 2026.