Zehnder Group-rg Aktie

Welcome, everybody, and I thank everybody that you're dialing in, take the time to listen to our presentation. I will do that together with René Grieder, our CFO. And in the next 30, 40 minutes, we'll give you some more insights about the first half in terms of what happened with the business in the regions, but also in the segments about the financials that we achieved, but also a short outlook for the remainder of the year, and we should have plenty of time afterwards to address any open questions from all the participants.

So if we look at the first half 2026 at a glance, we saw further sales increase and quite a good improvement of the operational result. And it's clear that this was very much driven by our ventilation sales, that had -- they had a continuous growth, solid growth of roughly 8% organic, and that is -- was in the case both in Europe and North America and also across all subsegments of ventilation. At the same time, the radiator activity stayed under pressure. At least we see a certain stabilization in the European business. On the other hand, if you look at the total, they had a decline of roughly 3% organically.

Now with that development, the ventilation portion of the total sales are reaching now 69% of our total sales compared to prior year when it was 66%. And this growth was very much supported by the launch and also the rollout of new products in new markets. So for example, the product portfolio, which we already had launched in some markets, we extend into other markets. but also with the continuous growth of our ventilation-based climate solution. And that definitely is also in relation to what we see with the changes of the climate.

Now very nice growth we were able to achieve in North America, and that is thanks to our strategy, our initiatives we executed consequentially, and we believe that we now see also the benefits from that. Service is another very important topic for us. So we rolled out existing services into other markets, but we also launched some new services. One example I will present later on. And finally, definitely a highlight for us was the opening of several Zehnder Academies -- ones of you that have been at the Investors Day last year, they have seen the Academy here in Switzerland. So similar setups, not always the same size.

And these are very important pillars for us to really transfer the knowledge to all our partners and also customers and help to proliferate our expertise in technology for modern buildings, both in terms of what good indoor climate means as well as energy-efficient solutions. And finally, and that was announced about 4 weeks ago, we started the process of the divisionalization of our main activities, radiator and ventilation in Europe. And I will also give you a little bit of an update on that one later on. But let us look first at the market. So yes, we do see overall in Europe, a recovery of building permits.

However, this is not yet reflected in construction completions. On one hand, there's a time lag. On the other hand, it's also fair to say that not all the permits ultimately executed. A very good example for that is Germany. based on uncertainties, higher costs, interest rates that have risen, and that obviously has also an impact. Now some markets are doing better, Netherlands, Spain, Eastern Europe, but there are also certain disappointments. In the first half, we were somewhat disappointed about the U.K. development. That was a market that did very well last year based on a particular regulation, which helped us in one part of the business.

On the other hand, we believe that the Building Safety Act, which was implemented in 2024 has an impact also there on the building construction because it's a very rigorous process, 3-stage process that every permit has to go through before approval, and there seems to be a bottleneck now also with governmental positions. And until we finally get the permission, obviously, many things have happened, -- costs are more expensive, and that seems to be the case that some permits or some permits ultimately are not being executed. On the positive side, once you are specified, that means that you can also not be unspecified anymore.

And I think what is also fair to say that, for example, U.K., we do have quite a solid order pipeline with projects that are specified. They're just not happening at the speed that we expected them. If we look at North America, it's not so much the market itself. It's definitely the trend towards a better indoor climate that supports us. Our portion in the market is still relatively small with these kind of solutions, but also stricter codes that are developing state by state, sometimes even a community level. On the China front, there's nothing new to report. Actually, China reported again a double-digit decline in new construction starts and that obviously has an impact on our business there as well.

Radiator markets remained challenging. Even though it's not so much the volume, it's more also the structural change. We see a trend from, let's say, higher-end products towards lower-end products or lower price models, and that's something that we also see in our product range. And at the same time, there's an existing overcapacity, which puts the whole situation, the whole business on the price pressure. Now obviously, something that we want to focus on, and we also see an ever-increasing interest and demand is the cooling solutions, which we call the ventilation-based cooling solutions.

On one hand, I have to maybe refresh your memory, even a regular Zehnder ventilation already has a passive cooling effect in that, for example, we utilized the possibility to bring in colder air during the night through a bypass and then maintain the cool air in the house through the energy recovery capabilities with the heat exchange. That means then the hot air staying outside. And by that, we already have quite an impact on the indoor climate. But what we have launched a couple of 3 years ago is the ComfoClime, which is a module that you can put on top of the existing ventilation unit, which has then an active cooling. And that can be done as a remodel, but it can obviously also bought in the combined set for new build.

There, we see that the interest is increasing strongly, not least because of the current situation and the many hot days during the summer that we face also this year. On top of that, we have a new product, which is launched in a few markets only, particularly Spain. That's also a product of the acquisition of Siber. That is not the same like the ComfoClime. There, it is an external heat pump. So like with a split climate system or air conditioning. The difference to an air conditioning unit is that we replace the majority of the air and exchange it with fresh air and on top of that cool. So the cooling performance is higher than with the ComfoClime.

And at. The same time, it doesn't have the same draft like you would have with the regular air conditioning unit. So that's something that we feel has also some potential, but still very much at the beginning. Another very good story that we're happy about is the rollout of the Siber product portfolio into all European markets. And you see we have introduced these products now in Italy, Belgium and so on. And with the introduction now to the last remaining markets in the Nordics, we will have that portfolio available across all of Europe.

And it seems to really fill a gap in a more price-sensitive multifamily home market and that this is the case. You can also see in the increase in sales in the first half this year, we were actually able to increase the sales for full year 2025 by more than 150%. So the volumes really starting to become meaningful. If you look at the North American markets, we are very happy that we have now also a first academy in North America, which we opened in April. Which gives us the opportunity to do trainings, to also explain like we do here in Switzerland on how things work, how things do not work and really gives us the possibility to convey this thought leadership to all these stakeholders that we want to address it to.

At the same time, we have earmarked a phased approach into the states or various states in the U.S. You see at the top right. And we were able to increase our partnerships with new distributors, sometimes changed distributors across the North American targeted markets. And finally, it's very much about also making these solutions more familiar in the market. So we had several campaigns, for example, the Wellness by Design campaign, which was very much targeted towards luxury homes and spas, but also in Canada, a campaign, which we call Proudly Canadian there, it helped us that one of our main competitor actually ceased the production in Canada.

And as you know, there are also certain not animosities but at least challenges between the 2 countries based on the tariff situation. Now the topic that we announced in June is that we have started the divisionalization of our main activities in Europe, to really reflect the shift of the markets in totally different directions. And hence, the need to focus on these different priorities across the whole value chain. So on one side, we have the ventilation business. It's in a growing market. It's really about innovating, being the best-in-class, also making sure that we expand in the market, expand our market reach.

And then on the other hand, we have radiators, which is obviously a shrinking market where it's all about highest cost efficiency, but also adapting the organization, but also the offering to the market reality. And while we are not changing our fundamental strategic directions, this should really give both activities the freedom to operate. and set the priorities while at the same time, have the full end-to-end P&L responsibility. So we believe that will give an undiluted focus, a lower complexity, higher agility and really a more entrepreneurial way forward.

This has an impact. I mentioned that also the way we are set up at the Group Executive Committee, we reduced from 6 to 5 members, and we will have new President for Residential Ventilation Europe and a President for Radiators Europe. In the meantime, since the announcement, Silvia Witschi, she joined the Group Executive Committee. And her and Jörg Metzger, they will take over the responsibility for the division, Residential Ventilation Europe with Sylvia and President Radiators Europe with Jörg as of 1st of October, while our former colleagues, they are now phasing out and are still available for the transition from the latest end of the year.

Now the process to go into that divisionalization, I don't want to go into details, but I can say we are on track. Idea is that by 1st of October or plan is by 1st of October that we really have operationally all the business functions split. That's the first stage. And then in the second stage, on January 1, 2027, we really want to also establish all the surrounding functions to some extent, also supporting functions so that we're fully autonomous within the divisions. And then as of then, it's about optimization. It's about really living in the new setup going forward.

Now this chart is something that I always show because we're proud. You see 2026 is not yet in, but you have seen the increase. So we believe that we can continue that chart. But what I would like to do is also give you a couple of examples because I believe they're interesting. So the first one on the left is actually such a solution where we have a combined ventilation and cooling system that we put in all these new apartments. I think interesting is that these are apartments for social living, and that is very much related in that particular situation with overheating, which is becoming more and more a challenge in many of the cities all across Europe.

The one on the right is also a nice one. We got a prize for that. And it's a light commercial unit. The specific topic here is that it is specified and certified as a Passive House unit. So also there, we try to differentiate with our offering, and we seem to have some initial successes. Now the one here on the left is a typical example from our Canadian colleagues. So that is a big development in the Toronto area. And you see because it is mandatory to equip every apartment, every new building in Canada, we see that all the 700 apartments were actually equipped with units that we were able to produce and deliver.

And finally, on the right side, that is now the custom-built home situation, which is very familiar to us. where you see a design house that has also a ventilation from Zehnder to guarantee the necessary indoor quality of the climate. The Zehnder Academies, I mentioned that. That's something that we really want to put into all relevant markets. For us, it's absolutely crucial that we can increase the penetration rate and therefore, also the understanding and the knowledge about our solutions. And this is our possibility to do that. And hence, that we were able to open 4 other academies is really a big highlight for our organization.

And the Air Quality Monitoring is the service I wanted to go in specifically. This is actually a service in our Clean Air Solutions business, where we have air purification as a service as our business model. Now instead of just cleaning the air, we also are able to monitor the air online. So you have constant visibility on where -- which trends you have in your pollution, but also can set alarms and ultimately can also be an entry point because very often customers or potential customers are not even aware of the problems. They might see some dust.

But if you really then make it visible, might also be an entry point to then add actually bolt on the air purification service. So it's really an add-on service. It's all inclusive. So we organize installation, we organize positioning, we organize maintenance, we organize replacement if necessary. The only thing that we are asking for is actually a flat fee per month like we do also for the air purification in Clean Air Solutions, that particular segment. But also a couple of projects that we were able to do on the radiator side.

Interesting here, it's a new build. It's a big project. We see 377 apartments in Poznan. And you see up to 1,300 units were sold and built into this project. And interesting is also the last bullet point. That's only a first stage of this project, and it's anticipated that there will be several more. And hopefully, that means having had the first order that we can also then follow up with the orders for the next project phases.

And then on the other side, another example, and that's really now for more the premium side with the Charleston that goes into this 5-star hotel as a refurbishment that will be probably the more typical projects like we know with 829 units for the electric Charleston in every bedroom. So much for the first half and a couple of impressions about our projects. René, I will take -- I will ask you to take over.

Thank you, Matt, and good afternoon also from my side. I'm happy to give you an overview about the financial performance in the first 6 months. We achieved a sales growth of 3%. Organically, it was 4%. We had 1% negative foreign exchange impact, mainly from the Canadian and from the U.S. dollar, which is weaker than 1 year ago. After a slow start in 2026, sales picked up with especially strong months in March and June. We had already 2 price increases.

One was in April and was then in July, an extraordinary one in July to offset the higher raw material costs in connection with the war. Customer typically place orders ahead of a price increase to benefit from the lower price level. June alone generated EUR 8 million more sales than 1 year ago. On the profitability side, we achieved an adjusted EBIT margin of 9.5%, which is within the communicated midterm target range of 9% to 11%. So it's a clear improvement. So the sales increased 3% and the adjusted EBIT 15% to EUR 37.7 million.

On the other side, the operating cash flow generation was weaker than expected. There are 3 main drivers for this development. First, the strategic inventory buildup to safeguard customer deliveries during ongoing supply chain volatility. And second, trade accounts receivables increased, reflecting continued growth of our ventilation business. And third, we had higher customer and employee bonus payments as well as tax payments in the first 6 months compared to 1 year ago. In the second half of the year, we are expected to have higher operating cash flow again.

From the one-off effects, we had one one-off effect that is from the introduction of the setup in Europe that was EUR 5.5 million in the first 6 months. The net profitability slightly increased by 2% to EUR 23.9 million. Also, the equity ratio increased by 5 percentage from 51% to 56% compared to 1 year ago. From the sales development in the first 6 months 2025, we generated EUR 383 million. The radiator business slightly decreased by 1% for the total group. So the impact was EUR 4 million. But on the other side, we're able to grow the ventilation business by EUR 20 million.

That means 5% for the total group. And again, the negative foreign exchange impact of 1%, that was half-half, half was ventilation and half was radiator. So overall, we achieved a 3% increase to EUR 395 million sales. Also, our EBITDA improved by 11% adjusted EBITDA, that is 12.6% of our sales or EUR 49.8 million, which is a positive development as well compared to the year before. Let's have a deep dive to the different region. So the main region Europe generated 82% of the total sales. There, the ventilation growth was 7% and radiator decline was 1% despite of higher volumes.

So we sold more radiators, but with less value at the end. North America, there was a 2% increase in euro, but 8% in local currency. So the negative impact from foreign exchange effect was 6%. Ventilation is a very strong growth in North America of 18%, but a decline by 10%. Asia Pacific with clear decline. So it remains EUR 10.6 million sales in the first 6 months. And on the left side, we see the main countries for ventilation on top. That's Netherlands, Germany, U.K., Canada and Spain. So Spain is now the fifth important country and Switzerland is then #6 now.

That is due to the positive development in Zehnder Spain, but also due to the acquisition of Siber in 2024. The 5 most important countries on the ventilation side contributed to 55% of the total ventilation sales. On the radiator side, we have the 5 top countries, France, Germany, United States, Switzerland and Italy. And these 5 countries contributed to 76% of the total sales. Unfortunately, 3 of the 5 countries with a decline, so France, United States and also Italy were not able to achieve the level of the sales from last year. If we go to the segment development, so we have a clear positive development for the ventilation segment.

There's further increase of 7% to EUR 272 million. Organically, it was 8% due to the negative foreign exchange effect in North America. As already mentioned by Matt, we have countries with very positive development in Netherlands, Spain, Czech Republic and Germany. And -- on the other side, Ukraine was quite weak. North America in turn positive, U.S. and Canada with a positive sales development.

Due to the sales increase, we're also able to increase our margin despite the further investments in research and development, but also market development, as mentioned by Matt, for example, in North America, but also for also for Clean Air Solutions. So we achieved an EBIT adjusted margin of 13.9%. And in euro, it's an increase of 13% to EUR 37.8 million. And on the Radiator side, there's a decline by 5% Organically, the decline was 3%. So in Europe, there was a decline of 1%. And in North America, there was a decline of 10%. So we see a trend to lower-priced radiators and also the renovation activity in general are still quite low compared to the past.

On the profitability side, we are not able to make a big improvement. We're still slightly loss-making with EUR 0.1 million despite of different optimization measures. We closed the plant in Gränichen last year, and we also introduced the shift model in our German plant this year as well. So this will have a positive impact further this year as well, but then also for the years to come. But on the other side, we lost on the pricing and also we had a negative impact from the product mix.

Balance sheet. So we still have a healthy and strong balance sheet. As already mentioned, we had an increase in stock due to strategic buildup of inventory and also higher accounts receivables. That's on the asset side. Then on -- we also had a further increase of the equity ratio, and we switched from a negative liquidity situation of EUR 12.6 million to a positive net liquidity of EUR 11.9 million now at the end of June 2026. So that's positive as well. If we see the long-term development of the 2 divisions, -- so the positive trend from sales and also profitability continues on the ventilation side.

So we see a growth on that side to have a driver for the margin development. On the radiator side, we see a further decline, and that is then also impacted on the profitability development. Overall, as already mentioned by Matt, we generated 69% of our sales in the Ventilation segment and 31% of our sales on the Radiator segment. With that, I would like to hand over back to Matt for the outlook.

Thank you very much, René. So if we look at the market overall, yes, I mean, the geopolitical situation, as we all know, is not really improving a whole lot, and that will have an impact on all European economies. Nevertheless, and I think that's also anticipated by all the forecasts. There seems to be a recovery happening. I think the only challenge is that it takes time.

So while we see that some markets are doing quite well, and I mentioned them before, Holland, Switzerland, we just also read it this morning in the newspaper, Eastern Europe, Spain, but also U.K., we believe will catch up to some extent. And we also see other markets that are just dragging on with that recovery, namely also Germany, which has, again, this year, a lower completion rate, substantially lower completion rate than last year, but also Italy, Austria, smaller countries in Belgium. Now if we look into the 2027 forecast, that is supposed to improve steadily.

But again, the challenge is it is a very timely process. The renovation market has also stabilized, albeit at a relatively low level, but there the same situation, we believe that it is going in the right direction. However, second half, to what extent that will already have an impact that is questionable. And definitely on the radiator side, competitive pricing is ongoing and also that certain structural shift towards lower-priced models. Now in North

America, actually, the market itself is not so different from Europe, if you take Canada, for example, Canada housing starts have actually declined at beginning of the year by 7%. And also in the U.S., there is a decline of 3% -- now it's different by segment. So multifamily and renovation markets, we see a higher resilience. And in the end, it's not so relevant for us because for us, the relevant topic is really how fast can we get our products known our solutions into the market.

And that's why we don't believe that this will have such a massive impact on the future for us. Now China, I'm afraid to say there is no change anticipated even though also there are certain niches like the top housing market are slightly recovering. But then in the mass volume market, there is still a decline since there are massive overstock in empty housing, and there is really also a price decline for the available housing. So it's also the purchasing market that is massively under pressure. So what does that mean for us? Well, I guess, not an immediate change in the trends that we are experiencing now.

Obviously, we believe that we do have the right strategy that we also see the benefits of these initiatives, and we will try to really focus on those initiatives. So on the ventilation side, it's further investments into product innovation, into product launches. It's the service business, also the market penetration expansion and on top of that, also digitalization, which offers, again, additional opportunities. And at the same time, with the radiator side, we do have to leverage now the existing footprint, which we still have opportunities.

René mentioned that we closed the plant last year. So these impacts have not yet shown their full impact. But at the same time, we have to continue to adapt to the market realities and see on how much we will support it by a recovering renovation market. The situation will be very different by market. So that has then also to do to what extent we are exposed in what market. North America, maybe a certain lull temporary more because of some decline of investments into new projects. But I think in general, codes working against that, increasing codes, but also the penetration rate.

So we have to continue to be cautious with how we operate. And ultimately, what that means in total anticipation for the year, yes, we believe that we should be able to maintain a margin at the level for the first 6 months. And as René mentioned, that will be within the targeted range. Sales, we have a bandwidth from EUR 770 million to EUR 790 million. So we are short of the 5% also related to the delays of the recovery of the market. So these are the anticipations for the second half of this year. And I'm sure there are questions that you would like to ask and that we can try to address.

Thank you very much. Also a very warm welcome from my side. I know you're in the busy reporting season. It's wonderful weather outside. So I very much appreciate that you took the time to be either here or to dial in into the call. Today, we'll do it like in the past. I will give you an update on where we stand in the next 30 to 40 minutes. So I'll do that together with Rene, our CFO. And I will start first with a review of 2025. Rene will then dive deeper into the financials. And finally, I will talk about current market trends that we see what that might mean for us.

But let me first start with a review at the glance. We had very positive ventilation sales growth, 18%, and that means the first time reached EUR 0.5 billion sales mark. And that was possible due to market share gains in most of our key markets. And I think that is a very sound basis also going forward. This is not just how we anticipate or estimate the market. This is also how it is confirmed by statistics from local associations. I think also good for us to see is that the acquisitions, which we made in the last few years are contributing over proportionally. The latest one was Siber last year. And also with Siber we see that the original plans in bringing these products outside of their home market in Spain are progressing nicely. But it's not just Siber. It's also a company like Airia, which we acquired a few years back in Canada, which really is the sound foundation for sustainable growth in the North American market. And even the smaller acquisitions like company Caladair, for light commercial, but Filtech, they're doing really well.

A very important topic for us is to grow service business. The people who attended the Capital Market, they know that we're really putting major efforts into that. And again, there, we made substantial progress in our initiatives and we can say that service is really becoming more and more a relevant pillar of our activity. And the same is true for indoor climate solution. Maybe I can refresh your memory. Here, we're talking about air-based climate solutions, which can cool and heat at the same time, with exchanging the air and bringing a good air quality into the house. It's a niche that we really want to become a dominant player in. Also there, we were able to really substantially increase growth. Now on the other hand, we have another activity, which is radiator, and it's fair to say that the pressure is on, it's market induced. And obviously, the focus there was a totally different one. It was about further adapting capacity and reducing costs, while at the same time, obviously maintain the operational strength.

But let me look first a little bit more into the market itself. And I think it's fair to say that the overall in security and uncertainties still weighed last year on our activities. And so we didn't see any broad recovery of the market. That is true for both new build but also for renovation. Just to give you a couple of figures and there from the latest Euro construct statistics from last December. If you look at the overall new build completions in Europe, they again went down 10% in 2025. Actually, the decline was stronger than the year before. And our 2 largest market, which is Germany and France, they are the tail lights. Germany is minus 19% and France with minus 17%, but also U.K., Italy, Spain, other important markets, they did not show any growth. In the case of Spain, for example, the anticipation going into 2025 was very positive. But when you see what actually happened, it was another decline of 3%. And even renovation did not show any recovery. And renovation actually last year was more negative than anticipated again. If you take Germany, for example, it was now in the fifth year, negative.

Now this doesn't sound very positive, but at the same time, I can confirm that we see some pockets of recovery and some signs of growth in certain regions. So U.K., for example, and that is not new build related, but is really related to renovation and is regulatory related or Eastern Europe, Poland, for example, where the interest rates have come down, and now it starts to slowly pick up. Also Holland, and I will talk about it in the outlook, we see a positive development. Now the other important market for us is North America, and I guess there, it was relatively stable, not so much if you take the U.S. in terms of new build construction that was also declining. But there, it's for us about penetration. And what we see is that the regulations are going in our direction, not across the total country, but in certain states, and that helps us. And Canada is our core market for ventilation, actually was relatively stable. And again, there, we were able to gain market share.

We also have activities in China. And China, it's fair to say that our traditional model, which we had until 2021 or until the COVID crisis is dead. So there, we are really shifting to new pockets and have the initial successes, but it will take time until we see there a substantial growth again. And again, radiate the market, I mentioned that before, negative, the market as such. And we also have that confirmed by first figures that are presented from our competition are published. But at the same time, and I think that's another element that we have to consider. We have a certain structural change in the market coming from more expensive products towards lower products and [indiscernible] as a premium provider, obviously, is very much affected by that. So how do we do in that challenging market environment? I think we're reasonably satisfied, and I think we had a reasonably good year.

Two markets, Netherlands and the U.K., they really show the growth spurt. U.K. already explained. And in the Netherlands, I think it's fair to say that we were able to achieve substantial market share gain. Siber rollout. I also mentioned that before. We have initiated or we have launched these products in markets like Italy. We have also launched them in the Nordic markets. We're in the midst of launching them now in other European markets and actually, we're ahead of the original business plan. The air-based climate solution, yes, it's still a relatively small portion, but it's first year that we achieved a double-digit sales turnover, and that represents a growth of around 80% in volumes. And I think -- that's a very good achievement, and we are very happy about that. But also the sales in North America, they grew, and that is in both markets, Canada and in the United States. And it has to do that we were able to secure new distributors for certain new regions, but also expand our sales team.

And finally, again, something that people are very familiar since our Capital Market Day who ever attended. We have that business, which we call Clean Air Solutions, which is a service business for filtration of air in industrial environment. That is a steady contributor. And we again expanded in new markets. We opened or we started sales in the Czech Republic. We also started sales in Spain and in Hungary. So we can anticipate a similar development like we had in the last 3 years. Finally, school business, it's a typical application for light commercial, that's an application where in various countries, you have seen subsidies, for example, Germany. Unfortunately, we missed out at that time when this program was happening in Germany, but we were able to participate in Ireland, where you also have now mandatory in every school, a heat exchange-based ventilation solution. They're partially subsidized. And I think that for us, in that relatively small activity is rather a breakthrough.

Now at the same time, I mentioned services. We harmonized the service packages. We rolled them out all across Europe. We introduced new services, for example, tube cleaning, but we also multiplied online training for our partner companies. We installed new academies like we have here in Switzerland, for example, in the U.S.A. at the East Coast, but also in the U.K. We just opened in January in the Netherlands. And even in Norway, now they're not at the same size like the one we have in Granichen, but it's really the location where we can bring in all stakeholders, educate them and really bring the concept of good indoor climate across to the decision takers. So as a consequence, we had a good growth in service. And so these efforts start to pay out.

Finally, I think it's always nice to get. We also received multiple awards, for example, in Switzerland, the Swiss Architect Darling Award, where we are now in the top 3 position for many, many years on a continuous pace. And also another award, and I have to read how it is exactly expressed, The Solution of the Year 2026 for Renovation Award in France for ventilation, new ventilation products, and also the Top 3 Recognition for German Sustainability Award, which also shows that we are still believing in these efforts that we're doing on the sustainability level. Now let's look at the radiator segment. And yes, there, the focus obviously is a total differ. It's about adapting capacities, about cost reduction. And as you know, we closed the factory in Switzerland last year. and that is concluded.

But we also adapted the capacities in our other big plants, for example, in Germany, we're in Lahr, that's in the South of Germany, where we reduced as of 1st of January to 1 shift from 2 shifts. But also, it was a measure that we took in the towel radiator factories to really adapt our capacity to the market demand. What we're also doing all the time is to look at opportunities to outsource certain production steps. That is not necessarily a cost reduction, but it obviously helps us to flexibilize costs. And we're initiated a portfolio adjustment, again, to make it less complex to ultimately also have a benefit on the cost side. We need to do that without weakening the operations. And I think with the closure of Granichen, we have now no product that is produced in multiple locations anymore. We have one product or every production is focused on certain products and gives us synergies, not just because of the cost base, but obviously also how we deal in the processes.

We also launched a couple of new radiators, and we also launched a new immersion heater platform. That's the electronic element that heats the radiator, for electric radiators, which is up-to-date design, but it's also a new software platform. It's connectable. It is something where we obviously can really be on top also in that part of the business. Maybe just one word to the North American market. In the U.S., actually, the radiator business was rather stable, which is good. There, we have a relatively old plant. We have to obviously make sure that we maintain the plant because we also see that, that market is holding on.

But it's clear, our transformation is progressing and you see that we are now 2/3 ventilation business. And so we are really shifting from a component manufacturer. Radiator as a component for a water-based heating system towards a HVAC solution player in the ventilation and all the topics around it industry. And again, you see the growth over the last few years, average around 15%. We feel that is something that should be our ambition also going forward. Now maybe I can just show you a few reference projects to give you a feeling of the breadth of our offering and the relevance in different geographies, but also in different subsegments. What you see here is a development in social housing in the U.K. It's just a first phase, and they are supposed to be many more coming. Our traditional product, the ComfoAir Q was put in all the apartments. But we also are in different segments, for example, in the luxury vacation home segment. And this is a complex in Colorado. Again, to show that also good indoor climate is a big topic in the U.S. market.

I was just recently in California, in Big Sur, that's in between San Francisco and Los Angeles. We were just installing ventilation in the spa of one of the most reputable hotel, that's the Post Ranch Inn. I didn't stay there, the net cost $2,700. But I was told that when I was visiting Brad Pitt was staying there because it's right between Hollywood and Silicon Valley. And so it just shows that we're really the thought leader also in this particular market and segment. I mentioned schools. This is an example from Ireland, and you see bottom right, the unit is different. It's a light commercial unit. And it's obviously a topic that is not just an Irish topic and many other schools. In fact, we know that pretty much all of the older schools have that issue of that quality of air. They have a potential and I think to have succeeded in that project is really a first step hopefully of many more to come. But also a couple of flagship projects for the radiator productivity.

Last year, we were part of the renovation of the Waldorf Astoria in New York. You see the product on the bottom right. These are these flat steel tube panels, a very nice project and obviously, also a good reference for us, or another one in Germany, the Castle in Oberschleissheim in Bavaria, where we have a typical application for our radiator activity. You see the radiator is relatively large, has to fit into that niche and that's what we do on spec, produce of what is needed for renovation. And finally, also a nice project because it combines 2 of our product offerings, one side, the ceiling panel on the other side, the ventilation, a sports hall with ceiling panels. You see them on top of these trips which is, again, also a very typical project that we handle in this activity. So much for the business review, Rene, I would ask you to your explanations about the financials.

Thank you, Matt. Welcome also from my side. Let me now take you through the financials in 2025. We were able to increase ourselves by 8% organically was 7%. The first 6 months, it was 8%. And then in the second half of the year, it was 6% organically. Thanks to the clear sales increase in both our profitability. So the EBIT adjusted is now 8.6% margin. And in EUR 65, that is an increase of 30% compared to the year before. We had EUR 1.8 million one-off cost that was related to adjustments in the area, production, Matt mentioned the one chief model, but also on the sales side to reflect the declining market and volume development from our side. With a strong focus on cash generation, we were able to increase our cash flow, operating cash flow by 32% to EUR 80 million. And that, I think, was a big focus to make sure that we can also pay back the syndicated loan facility.

Net profitability. Remember in the year before, it was a loss. And in 2025, we were able to achieve EUR 47.8 million, thanks to the better profitability of the business. Also an important key figure is return on capital employed. There we have a clear improvement of nearly 7%, thanks to lower capital employed and higher profitability. Let's have a closer look to the sales development between 2024 and 2025. So 2024, the total sales was EUR 706 million. And then in the first 6 months, we had 2 M&A effects. There were the investment of the climate ceiling business with a negative impact of 8 million sales. But then on the other side, the acquisition of Siber, EUR 20 million additional sales in the first 6 months. The second half was like-to-like, so no acquisition impact anymore.

On the radiator side, we lost EUR 13 million. In the first 6 months, it was only EUR 4 million. So we lost more compared to the last year in the second half of the year. The opposite on the ventilation side, we increased the sales by EUR 62 million. In the first 6 months, it was EUR 30 million. So we even had more sales in the second half of the increase compared to the first 6 months. On the other side, there was a negative foreign exchange effect. The first 6 months, it was more or less 0. And now in the second half, it was about EUR 6 million, mainly due to the weaker U.S. but also Canadian dollar. All our key financial figures improved. I just want to highlight EBITDA development. So the EBITDA adjusted increased 16%, and we were able to achieve a double-digit EBITDA margin again with 11.7%.

Let's have a closer look to the 2 half years. In the first 6 months, the EBIT margin was 8.5%. And in the second half, it was 8.6%. And we also need to consider on one side, yes, we are able to grow, but we also continue to invest. So it's not the idea that you freeze out the lemon. It's to find the right balance between profitability improvement and to strengthen our foundation on the product innovation, but also to develop new markets like in North America, like in South Europe, like in Eastern Europe to make sure that we can further develop our business. From the ventilation side, the sales was EUR 248 million in the second half. That is less compared to the first 6 months, but that is the normal seasonality for the ventilation business. Because in the first 6 months, you have more working days on the construction side. The second half of the year, you have the summer break and you also have the Christmas break. And that's why it's normal to have less sales in the second half of the year. And in both half year, we were able to increase our sales on the ventilation side.

So organically, the first 6 months, it was 15% and in the second half of the year, it was 14%. So the organic growth rate was very similar in the 2 half years. It was the opposite on the radiator side. So there was a decline of 8% in Euro. And organically, it was 3% less in the first 6 months, and it was 6% less in the second half of the year. We still do the main part of our business in Europe with more than 80% of the sales. There, we were able to grow 10% and North America contributed about 15% of the total sales. Also there, we were able to grow by 4%. On the left side, we see the main ventilation and radiator countries, the top 5. So on the ventilation side, Netherlands is clearly #1, then followed by U.K., Germany, Canada and Switzerland.

And also positive to mention is that except Canada, all of these 5 countries had a double-digit growth. Canada, local currency was close to double digit, but due to the weak Canadian dollar, it was then just a small growth in Euro. On the radiator side, all European countries were faced with a declining market environment and also a declining development from our side. In U.S., there was a small growth in Europe, but also in local currency. Our 2 segments, ventilation. So as mentioned by Matt, we were able to achieve the first time in the history more than EUR 500 million. So to be exact, it was EUR 501.7 million sales, in Europe was an increase of 18%. Organically, for the whole year, it was 15%. And again, the development was quite similar for the first 6 months and the second 6 months from the organic growth rate, driven by Netherlands and also Ukraine, we really had an extraordinary growth in 2025.

So the strong sales development supported also the margin improvement. So the EBIT adjusted, but there was no special impact in 2025, increased by 42% to EUR 62.8 million. And on the EBIT margin side, it was 12.5%, so 2% increase in margin. And again, it's always a balance at the end between profit realization and further investments in R&D, in market development. On the radiator side, it's exactly the opposite build. So we have a declining sales development of 8%. Organically, it was 5% and also the adjusted EBIT decreased again significantly. Despite of a lot of measures taken, I would say, to compensate the lower volumes. I would say we were able to compensate the lower volumes with cost measures, close of Granichen, [indiscernible] model also adoption of the organization, but there was also pressure on the prices. So we had a negative price impact, which we're not able to compensate.

And positive is the first 6 months, it was a loss -- a small loss. The second half of the year, it was at least a small profitability, thanks to the different measures taken over the last few years and the impact of it. Cash was a very important focus for us. So we had an operating cash flow of EUR 80 million, and that was then -- that gave us the possibility to fully pay back the syndicated loan facility, which we used for the acquisition of Siber in 2024. So we paid back EUR 60 million to the banks. CapEx was on a low level. So we invested about EUR 17 million. That's clearly below the depreciation level. And so also there, we were very careful to manage that in a proactive way. Balance sheet. We still have a solid balance sheet, supported by the good cash generation and also our financial discipline. So we were able to decrease our total assets -- we are able to increase our equity ratio from 51% to 59%. And again, we now have a net liquidity position of EUR 32.8 million compared to a net debt the year before of EUR 11.8 million.

Long-term development. So between 2022 and 2024, we lost sales and also profitability. And thanks to the positive development in 2025, we're able to change this trend. So we're able to increase the sales again and also the profitability. The picture looks different for the different segments. So on the ventilation side, even in a difficult environment between 2022 and 2024, where the market were declining, we're able to achieve a double-digit EBIT margin and with a further improvement then in 2025. On the radiator side, it's declining now since 2022. And despite a lot of measures and the reduction of the breakeven point, we were not able to change the negative trend on the profitability side. And again, now 66% is ventilation and 34% is radiator. So the portion of the ventilation is clearly increasing over the years.

Thanks to strong cash generation, we also increased the dividend. So we have a dividend policy to pay out between 30% and 50% of our net income. And so the Board of Directors proposes a dividend of CHF 1.40 compared to CHF 1 a year before, and that is an increase of 40% or a payback ratio of 36%. The dividend amount, if that will be approved, then about EUR 70 million. There will also be some changes in the Board of Directors. So Urs Buchmann will not be standing for reelection, and the Board of Directors will propose the election of Mara Zehnder as a representation of the family. With that, I would like to hand back to Matt for the outlook and the market development.

Thank you very much, Rene. So again, let's look at the market trends first. This is the guesstimate Euro construct new build completion. You see good thing is it starts to change from red to yellow and partially even greenish. And I just would like to highlight a couple of figures. First one, 2026, Germany, minus 10%. So it's anticipated that Germany, again will have a decline. On the other hand, and I think these are first positive signs. If you look at the new build permits in Germany, actually went up by more than 10% in 2025. And if you look at the minus 10% and you compare it to the year before, actually, the year before 2026 was still seen more negatively with minus 15%, now it's minus 10%. So it's really a question mark when will that end with us because we are late cyclical. But I think also in Germany, there is a certain light at the end of the tunnel.

Another one that I would like to point out is Holland. You see the plus 16%. I mentioned it before, there is a massive lack of apartments. roughly 500,000 units, and it is one of the top topics also for the new government, which was just installed the other day to make sure that there is now a start of building happening. And it is clearly an anticipation that restrictions that were hindering will be eased. Where it's going to be the 16%, I think that's a question mark, but definitely a direction towards positive. Spain, again, very positive, anticipated was also for 2025 did not happen. And I mentioned the issue there is really to find qualified labor. So we'll see whether there is an improvement there. I would be still a little bit skeptical whether these figures are coming through. But nevertheless, you see that overall, it goes in the right direction. That's also true for renovation.

And Germany, after now several years of a decline is for the first time, again, anticipated at a very modest growth. And Italy, which was lousy in 2025 that had also to do with certain subsidy programs that the government had installed before that, is supposed to stabilize and similar is true for France. So we believe that there is a certain recovery in the market. And we also believe that this will gain momentum throughout the year as we go. Longer term, the building codes, they are happening. We know that buildings close to zero energy standard will take more penetration in Europe. But I think on the other hand, we also don't know whether we have additional insecurities, global topics that will affect that. Right now, there are debate in Geneva, Iran and U.S.A. and nobody knows whether that or what that will bring again in terms of insecurity. And I think that's a fact. We have seen it in 2025, and we have to assume that will continue a price pressure, particularly also on the radiator side.

Now if you look at the North American market, I think overall, relatively stable, different by segment. But I think there in the U.S., it's mostly the regulation that will support in the long run. And if you look at Canada, it was stable in 2025, and we also anticipate to be stable in 2026. What I wanted to show you on that top -- the bottom right graph is the situation in China. And what you see in the orange line, that's new starts. And if you look at '21, take that as 100%, we are now in January '26 at a 25% level of what it used to be, just to illustrate that there is really nothing happening there. And if you look at the green mark, these are completions. And logically, completions follow new starts. So completions, they will further go down. And that's the reason why we have and we are changing the business model there. We are venturing into new potential markets. One is light commercial. I'm really happy that we're able to secure a framework agreement with the largest hotel group in China, the H World Group or H group. And there, for example, the master licensee of the [ Accor ] Group. This is a relatively more stable business than what we used to have in the real estate development for big apartment buildings. Nevertheless, we cannot assume that we'll have any support from the Asian or from the Chinese market. So what does that mean for us? Yes, a slightly positive, more friendly market environment. But I think the strong growth, particularly in Holland and also in the U.K., we cannot assume that they're repeating. I'm not saying that they're coming back down, but that we have another jump to a next level, that's probably not realistic.

You have seen we have several initiatives that we're working on. These are strategic initiatives. We're standing firm to those initiatives, and they start to contribute more and more, and that should help. Nevertheless, in light of all the other things around us, we stay cautious and we'll also -- will not jump to hoops. And we want to maintain the investments. Because we feel that we're on track, and we want to make sure that they pay out more and more as we go. So outlook, we don't want to give an outlook for the full year at this stage. We don't feel comfortable. We do it like last year. We plan to give you an outlook by midyear when we have a better understanding of 2026 really brings to us. But I mentioned before, strategy is clear, and it's also clear that we stick to our course. We want to and seek expansion in North America.

We also seek penetration in Europe and we will support that. And this is in certain segments where we still see a bigger potential in our traditional segments, for example, in multifamily homes, but also light commercials. The service business, we have 1 million units in the market in Europe. It's an addressable market that we really want to build up as we have made first progress last year, but we'll continue on that. But also the acquisitions, we're constantly seeking new opportunities. I mean it's a little bit difficult to exactly predict when something like that can happen. And also on the renovation side in terms of product offering, there are opportunities that we have not fully embarked on. So we believe that the growth that we have seen also in a very challenging time in ventilation proves that we are going in the right direction. And obviously, we want to stick to that and make sure that we can continue that.

Now if you look at our midterm targets, you see that we achieved the 4% if you compare it to 2020. Well, we say 5%. But don't forget, that is including all the issues that we had. Nobody is talking about Brexit, nobody is talking about COVID. Nobody is talking about energy crisis anymore. So in a very adverse environment, that's also including a radiator activity, which had a double-digit decline over the last 3 years. And in that light, if we do have maybe a little bit more stable situation going forward and more -- a little bit better market environment, we believe the 5% are achievable. If you look at the EBIT, we are at least close to the bandwidth. That's positive. Again, we just saw it before, that is at a radiated activity around the breakeven point. And if you look at return on capital employed, I'm glad that we already hit north of our target with the 22% versus the 20% that we set out as our target.

A very warm welcome. Thank you very much for coming to Granichen. Granichen, the center of gravity, at least for The Zehnder Group for more than 130 years. I know for you might not be exactly around the corner. So I appreciate very much that you came through fork and traffic to this beautiful location. Probably I've seen coming here that actually this is quite a vibrant area. We are literally in the center of Switzerland. The 4 largest German-speaking cities are only half an hour apart away from here. And we have train and we have highways, and you probably know that most of the large distributors, but also logistics company are actually located here. But here, we are in a small valley, the Wynental, and we have also our train for more than 100 years, and that's the reason why also this valley actually has quite a long industrial history, particularly, we're talking about small and mid-cap or midsized companies, family-owned, but it's not just Zehnder.

But we don't want to talk about the Wynental. We want to talk about the Zehnder Group. And what we want to talk about, particularly today is our Ventilation business. The Ventilation business, which we have started more than 20 years ago, the ventilation business that today is 2/3 of our total revenues. The Ventilation business that has grown average 14% over these 20 years per year. And obviously, therefore, is our core business and even more so our strategic pillar going forward.

And the way we want to do that, this deep dive, and that's also the title is with few sessions, but also then a visit of our academy. And I am supported by my colleagues. I will start with a kind of an overview, also a strategic overview. But then we have Dorien Terpstra. She is our Chief Commercial Officer for the EMEA region, who will talk about the markets and the initiatives that we have in terms of service, in particular. Then we have Johannes Bollmann. He will talk about product innovation, also new solutions that we have. He is our Chief Operating Officer for the Ventilation activity.

And then we will break for lunch because we have a rather large group, we're going to split up. And while some have lunch, the first group would go over to the academy to really understand and see in details on how these units work, and then we switch. And then after lunch, we'll talk about Clean Air Solutions. And that's a little bit a separate activity. While we reported on the Ventilation, Clean Air Solutions is really a company within the company is concentrating on commercial filtration, and that will be done by Patrik Fransehn. He's in charge of that activity for, I guess, now 8 years, if I remember correctly.

And finally, I think also important financials that will be done by Rene, our CFO. Most of you know him already, and we'll have plenty of time afterwards to wrap up and obviously, cover all the questions that you might have.

Now before we dive into the topic, I just would like to show a small video. And it's really to give you a sense what it is all about this controlled mechanical indoor ventilation and what is all about with good indoor air quality or good indoor climate.

[Presentation]

Perfect means now that we know what it is all about, let's maybe look at what is really our ambition. What is, let's say, also the vision of Zehnder. So what we want to become is really the leader for this kind of solution for innovative, sustainable ventilation, but also heating and cooling solutions, and we'll get to that throughout the day.

Now this is a vision, but I think it's fair to say that already today, if you look at ventilation, and we're talking about this controlled mechanical ventilation, we are the reference in the market. Global is a very big word. Yes, we have still our heavy weight of our activities in Europe, but I will also try to show you what Americas, the North American market means to us also going forward. But at the same time, we're already selling today our products and our solutions in more than 70 countries.

And I think if we just look back and what has happened over the last 20 years, you can really say it has been a major transformation. From what was originally a component manufacturer, namely the radiators for a water-based heating solution, we have ventured into a system and solution provider in the HVAC industry.

And as I mentioned before, in the ventilation space, we talk about heat recovery and energy recovery ventilation, we are today #1 in Europe, but we're also #1 in North America. I will explain to you why we believe this is a market that will continue to grow and it's just at the start. It's not just about particular components of such a solution. Yes, you have a ventilator, but obviously, you need a whole solution with air distribution, possibly with other elements. And I think that's where we're kind of quite unique because we provide the total solution. And that means we don't only sell the total solution, we also make sure that whoever deals with us is actually a company along the whole life cycle of the product.

So it's about design, it's about the planning, it's about the installation, it's also about the aftersales service. And I think that's where we really can have a differentiation also to all the others that are in the market.

Now after sales immediately triggers the topic of service. And yes, service is probably not yet to the extent that we should have it. It's something that we strategically want to build up. But what is good to know is that in the last 5 years, we were able to double the proportion of service in total sales now to 15%. And the business that I referred to before as Clean Air Solution business is actually a pure service is obviously a substantial part of that.

But just to give you a feeling, we in Europe only have about 1 million installed base of these kind of solutions, first went in more than 20 years ago, growing steadily. So obviously, there is a huge opportunity to actively manage the service part. In one way to have replacement parts like filters, we recommend that every unit should have their filters replaced once or twice a year. And we know that we do not cover yet the majority of all this potential. So that's something. But at the same time, it's obviously also something that we can build further with cleaning of air tox, but we'll hear more about that later on.

Now a lot of that was own growth over the last 20 years, but I think it's also fair to say that we had many acquisitions that we carried out throughout the time. So in a way, we were a consolidator in the market, a market that has been very fragmented, and that's something that we also want to continue. And all that led now to the situation that it is 2/3 of our total sales, and that has shifted quite substantially when I started 7 years ago. The Ventilation business was 45% of our total sales, the rest was still hydronic components and now it's 66%. So you see that transformation is actually happening, is happening with an ever-increasing speed.

Now at the same time, and that's not the focus today, yes, we also managed hydronic components actively. And yes, probably that's more our sunset activity, but it's still an important part of what we're doing. So what we have done in the last couple of 3 years, we reduced capacities in all our production facilities along the decrease in market demand. We also closed 2 radiator factories. One is the factory that is here in Switzerland or was here in Switzerland right opposite off the road. Another one we closed in China. And we also exited the closed ceiling business. That's actually what you see up here. That was an activity that we have for quite a while, but we were not able to make profitable.

So let's go back to ventilation. So why do we believe ventilation is really the right horse to bet on going forward? Because there are actually some relevant economic factors that will drive that demand. And one is the regulatory environment. And so today, we estimate that roughly 50% of all new build homes in Europe are what is called close to zero energy building standards. And it is anticipated that this portion will increase substantially in the next coming years up to around 80%, '27, '28. That is obviously a driver. The tight hall means, and you saw it in the video, you need to reset or you need to circulate the air.

But I think another very important driver is an increasing requirement for a healthy indoor space, an increasing consciousness of sensitivity. And that has to do, yes, we spend 90% of our life indoor. You have shifting patterns in society, remote work, but you also have an increase in aging population. So indoor quality of the environment, healthy indoor quality is very important.

I think that's something that we, for example, see overheating of apartments is a big topic, but also, obviously, what you bring in from the outside to the inside and what you're able to suck out or extract.

It's also about affordable living space. We all know that there is scarcity of living space. And I think at the same time, it's a problem of affordable living space. And we believe that with our solutions, which really goes beyond just the ventilation into climate solutions that if we're able to do that and position that in the market as an alternative to what is currently used, namely these water-based solutions actually because you need the ventilation anyway, the tight hall, remember, that we can, at one point in time, make a water-based solution redundant. And then it becomes also interesting, not just because the energy savings, that's an addition, that's a benefit, but because we actually don't have to have 2 separate systems, you can combine all in one system.

And so these are really the drivers that we feel will play into our hands, and these are trends that are actually happening in Europe, but not just in Europe, but just learned yesterday, for example, California, as of 1st of January 2026 for all multifamily homes will require mandatory heat recovery and energy recovery ventilation in every new build house. So these are trends that are also happening in other markets of the world.

So we believe that we will benefit overproportionately from these global trends. And obviously, with our position that we already have and hopefully that we can extend that we then also will see the success.

So maybe just to give you an understanding about what really defines good indoor air quality or a good indoor environment. So in the end, it's all about controlling certain parameters. And we all understand temperature, that's an easy one, so between 21, maybe 24 degrees. But the humidity is obviously one that is very much underestimated. And we all know summertime 25 degrees at 50% humidity is comfortable; 25% at the high humidity is muggy, it's murky. So that's something that obviously also need to address.

Oh in wintertime, it's the other way around. It's very dry, then you have cough, you have a rough throat. So that's something that has to do with humidity. I think tight buildings, no air is going out. So to cycle the air, we obviously want to get rid of the CO2 in the house. You want to bring in the fresh air. That's another element that needs to be controlled. But then at the same time, yes, you could open windows. But if you open windows, whatever is in the outside there, obviously comes inside. Just one topic, allergies. It's a very big topic, 25% of Swiss population, and that's the Bundesamt fur Statistik have hay fever. So it's something that you obviously want to keep outside.

But you have other situations, find dust that you do not want to have in the house. And at the same time, you want to get not just the CO2 out of the house, you want to extract other volatile compounds. I mean if you cook, that's a typical one of [indiscernible] every Swiss knows that, you don't want that. And actually, these are also sometimes things that are not very healthy. And it's quite interesting just I have one of our new sensors that shows you green, red or orange and shows you how the quality of the air is. I have a house from the '80s. It's quite interesting when you cook on how bad the air actually gets and quite fast. So it really helps also to raise the sensitivity on that.

Finally, when you do that, you don't want draft. Everybody knows the American air conditioning units. When you switch them on, you have a stiff neck and you don't want noise. And all these parameters, actually, we're able to address with our ventilation or with our climate solutions. And we are the leader. And now the question is how do you define the leader? We are the thought leader. So we are the innovator that comes with new concepts, and you will see that. And hopefully, you will be also convinced. We also are the educator, educator of the market very often, let's say, the typical house build doesn't know about it. So what we are doing is we really go into the market and we train stakeholders, be it architects, be it planners, be it installers. And that's what we do in our academies, and that's the one from Switzerland that you will see later on.

So we are really the educator, but also in a way, the influencer. And this thought leadership, I think this is what we want to maintain, but also hopefully extend. And then with the growing market, obviously, really have the success and have strategically our position in a very large HVAC space because they are the big animals that focus on heat pumps and air condition, which are commoditized, but this is where we want to be in that particular space where we can really differentiate and also secure our strategic position long term.

So nurturing thought leadership. Yes, I mentioned it's about innovation. It's about total solutions, about integrated solution. It's about this life cycle support service. It's about the education, it's about the training. It's obviously about the geographic presence. We focus on Europe. We still have large opportunities in Europe. You'll hear about that later. We focus at the same time on North America. I will talk a little bit about that myself. The world is still big after that, but we have to make sure that we don't dilute our activities. So these are the 2 main focus areas. But at the same time, yes, we sniff at other markets, be it in Southeast Asia, be it in South Asia and hopefully, are able to then once these markets start to really drive benefit from that as well.

But coming with different markets, or even within Europe or within North America, you also cannot just have one standard solution. So important is that you're able to have, I call it, now adaptable solutions. You have different climates in Italy than you have in Norway. You have the same situation in North America. So you have also different building standards. You have different regulations. And to have solutions and a portfolio that actually can cater to these differences, that's the key. And I think that's obviously a quite fragmented business. As a smaller company, and I mentioned before, the very large companies in the HVAC industry, we might be better positioned for doing that. And in a way, it's also not so easy to build that all up. Size is not the key factor. It's really the way you can adapt to the local situations.

So what are the key measures going forward? Well, clearly, we bet on geographic growth, and I've mentioned before what the 2 main areas are. The service business, you saw before, it's still relatively small, and I think it's something where it's an area where we really have opportunities. We want to continue to be a consolidator. Ideally, we look for bolt-on acquisitions, be it in certain geographic areas where we have a little bit of an underrepresentation, be it also on some technologies that we can then integrate into our solutions.

And at the same time, yes, there are also certain segments in the market where we are not yet historically very strong. Historically, we have had a very good position in single-family homes. So one is obviously the move towards multifamily homes, but another one is also to get into the renovation. And renovation, as you can imagine, has different challenges. And so therefore, you again need certain products or solutions that are adaptable for that.

Replacement, obviously, it's not a unit that lasts forever. It's good quality, but it has mechanical parts that turn all the time. So we guesstimate that probably after 20 to 25 years, you need to replace the units. And since we were increasingly growing our business, that should be kind of a ground noise additionally supporting our way forward. And we don't know exactly today how much that already is because a lot of these units were sold to partners. So we don't know exactly where they're at. But I believe that already today in certain markets, it's a relevant portion of our sales, and that will increase over time.

And it's maybe interesting to note that Poland today is our largest market in ventilation, and that's also the market where we have been probably for the longest. And probably one part of that market is, in fact, replacement business.

So this is our track record. And you see it is a transformation that is ongoing. And actually, what we really want to do is to accelerate that transformation. And you see that it was own growth, but obviously also with several smaller bolt-on acquisitions, and that's exactly the way we would like to continue.

And now I just want to lose a few words about North America because it's something that we might not be so familiar here. I mentioned the new law in California. So North America, you have totally different situations. First, Canada versus the U.S.A. because in Canada, actually, it is mandatory to have energy recovery ventilation in every new home. So it's the market that is 100% penetration on new build. And we were able to purchase or acquire the company that had the #1 position in Canada, and that's the jump that you see between 2020 and '22. And that's where you also see that actually the Canadian portion of our sales is higher than the U.S. portion, even though population is 10x less.

But also at the same time, you see that we have already a substantial part in the U.S. market. And the U.S. market is 50 states, and you do not have national building, they call it codes. We actually have codes by state or possibly even by community. And I mentioned before the example of California. And so we have certain states in the U.S. that have the same penetration rate for these controlled mechanical ventilations like we have in Switzerland, for example, State of Washington and Northwest. And you have other pockets where it's already a known alternative as a standard. And I think there, obviously, what we want to try to do is to extend our leadership in Canada, but at the same time, and this is going to be a phased approach to really drive the development in the United States. And again, what we can provide is not just a product, but like here in Europe, we can provide the total solution.

And so here, you see where we're located. Red dots are our, let's say, locations and factories. We have 3 factories, in fact, 4 factories. It's a small factory in Vancouver. They produce heat exchanges. We have a big factory in Buffalo. It's right at the Canadian border in the state of New York, but we also acquired this company in Canada, which is only about 3-hour drive from Buffalo in London, Ontario. And then we have a factory in Massachusetts for hydronic, that's a radiator factory. But then we also have our center of competence for, let's say, the formerly imported products from Europe, which today we assemble locally and also source to a large extent, all the components locally.

And as I said, leadership in Canada, we want to extend, but we also want to now focus on the U.S. And the way we do that in red are our focus areas or focus states. So you have an existing base. I mentioned Washington before, but also in the Northeast. And that is very much with building stands, maybe also with, let's say, sensitivity for even environmental topics because that then normally drives codes. And you see that California is the one that we really want to focus now as an expansion state. And in California, I think the time is right. And you do have people that want to have that indoor quality, indoor quality like you have in Europe.

And then what we earmarked, and that's, in a way, a little bit of different approach is Texas and why Texas is just the state where it happens. And I think that's where the money is. But there, it won't be the codes. There, it will be an approach to really go in and try to be understood as a lifestyle product because in Texas, you have the highest amount of custom-built homes. And that's, in a way, a trial. If this is successful, and we have staged that in case, see when we achieve what and then we invest more, then we want to do exactly the same thing in Florida.

Now if you take the climates in Texas, you have very dry, but you have also very humid, big issue. Florida, very humid topic. So we feel that these solutions that we can provide is not only much more energy saving, but it's actually really yielding a better environment indoor. And I think that's what we are trying to develop like we did here in Europe, hopefully much faster in the North American market.

So if I look at, let's say, how will the market develop in general? Yes, North America, you hear that building activities are rather weakening. You hear different stories. But in effect that's not really an issue for us because for us, it's the issue, are we able to follow with the codes, understand what that means and then really increase the penetration rate because the penetration rate is still very, very small.

So overall market development is one, but much more important is, are we able to push our solutions into the market? Whereas in Europe, yes, I mean, I was asked already today, how do you see it? Now you see it more positive. Yes, we have signs that some markets have already recovered and some are maybe shortly before recovery. One of the big question mark is obviously Germany. And in Germany, if you look at Euro construct, the anticipation is actually that there will be higher building permits next year. Let's not forget, we are always late in the cycle. So we are not the ones that benefit early. So like a Geberit, ventilation unit is normally installed rather at the end.

So we do not expect a big impact in '26. But should that really now materialize, obviously, it's definitely something that will support more in the midterm. But nevertheless, we feel it's quite a stable situation and probably rather going in a positive direction.

Now I also read other news, and now you could also see it more negative. Yesterday, there was an article, Switzerland is at the brink of a recession. Germany, the barometer is again lower for the outlook than it was the months before. Nevertheless, we feel overall, there should be rather an improving situation.

So that's all for the big picture. Maybe just as a summary, yes, we want to be the leader. We want to be the innovation leader. We do have strong market positions. It's not a huge market, but it is a very beautiful niche where we can be the #1, where we also can defend the #1 position. We clearly want to grow in solutions, and that's something that you will learn about today. We want to also grow externally and play a role in the consolidation of the market. At the same time, besides Europe, we clearly also have a focus on the North American market.

And finally, service. For the, let's say, Ventilation business and the residential, that's the one that we mostly talked about right now, but also for the Clean Air Solution as what Patrik will present, is definitely an area that we want to build up to ultimately also have a much more stable situation, get less dependent on the new build cycle, which already today, and I think people who have attended the half year conference is also quite advanced because even in Germany, where we have seen a decline in new build over the last few years, all our key ventilation markets actually were able to grow. And that gives us also the confidence that this growth is on a sound foundation and that we can build on that and hopefully accelerate that. That's what I wanted to quickly share.

So also good morning from my side. In the coming 30 minutes, I will go a little bit more into the detail of the European strategy, first with some definitions and market sizing and then the key actions that we're taking, and I'll come back to your question during the presentation. I realize standing here in front of you today that I might be a little bit of a new face. So please allow me a quick introduction. Dorien Terpstra, I've been in the construction industry for approx, I just realized nearly 25 years, time goes fast, with companies such as Siemens Building Technologies for over 16 years in different markets in Europe and Asia, afterwards with an engineering firm called Poyry based in the Nordics, but a global provider. And since 2020 with the Zehnder Group. And I started as Managing Director of Belgium and the Netherlands and since the start of '24 as CCO for Europe.

And the second thing before we get started is why do I work for Zehnder? I will never forget during the interview phase when coming to Zehnder, yes, we have beautiful solutions and it's definitely an USP. But I had an interview with one of the account managers. And I asked him, why do you work for Zehnder? He said, I can make that very clear. He said, I just recently sold a solution to a customer that was experiencing health issues. And no, I cannot take away the disease, but because of the healthy indoor climate we created, actually, the medication of that person could be reduced.

Now if that doesn't wake you up in the morning, it does for me. We not only create healthy solutions, we also have a contribution to being more comfortable in homes, the indicators Matt already gave, but we also contribute to the energy transition with heat recurring technology.

That is a quick start. Let's now get to some numbers and indicates. So what are we talking about in the first half year of '24. '24 total ventilation sales was EUR 328.4 million, and it consists of different segments. So I will be talking about the red quadrant, the indoor ventilation, and I will give you a more detailed definition in a second. My colleague, Patrik, will talk about Clean Air Solutions in the afternoon. And then we have a separate -- under a separate brand core heat exchangers. One portion of those heat exchangers go into the Zehnder channels and into our solutions and another portion goes via third parties straight to market.

So when we look at indoor ventilation, we have different aspects of it. You will also see later today, and some of you have seen it before, is the actual climate devices that together with the air distribution and accessories such as valves and sensors, et cetera, we create into climate solutions. But that's one thing to have a full climate solution. It also needs to go to market. It needs to be installed. It needs to be commissioned, a very important step and also needs to be serviced over the life cycle.

To give you a little bit of a feeling now we come to the half year 1, 2025. So what are the key indicators? Within indoor ventilation, we see that the product share still takes the lion's share of all our sales. So approx 92%, yet service has already grown to an 8%, and I will show a little bit later on what our plans are for services across EMEA.

We talked a little bit about new build and renovations. And what we have seen, and I will show that in the upcoming slide, but here, you already see the result is that our markets due to the construction, new build construction going down in Europe a little bit, that our customers also move more into renovation. So if you look at our share of where we sell our solutions today is that we see 65% in the new build and 35% in renovation.

Then we have what we call have a so-called residential buildings, single-family homes, multifamily homes, but we also have light commercial. Think about schools, think about day cares. And there, we already have a 15% share of the total market as well.

Matt already indicated with all the trendings and the economic indicators that, yes, we see the first markets in Europe. When you look at single-family homes and multifamily homes, we see some return of the market. But if you talk about Europe, we have many markets, some markets grow faster than others. But fundamentally, the first indicators are positive for our growth areas. Having said that, at the same time, we are very well aware of everything that's going on in the world, which also impacts Europe. So we always remain cautious and plan accordingly. So just to come back also to the statement of Germany, we always plan on all scenarios so that we are proactive in steering our business.

Then we come to a picture of potential. And I always get very enthusiastic about this picture. It's something we have trained our organization on as well to have a common language across all European markets to understand and define our strategies. So what you see here is a segmentation of our markets. On one hand, single-family homes, the area what Matt already indicated that we were already known for in many years -- for many years. In the second column, the multifamily homes, which is a clear growing market segment and the light commercial. And then you also have bigger scale commercial and industrial solutions where typically also Clean Air Solutions fit in.

Then you have the new builds, the renovation share and the service share. Now I could imagine that when you look at this picture, you say, what are your sources? What we do and what we have built, and that is not something that we do one time. It's a structural process that we follow. We have a market intelligence dashboard that we use within our company that is being fed by external statistical sources and is being validated in customer interviews. So that means that we follow government statistics on new builds permits. We look at typical penetration rates into certain markets, and we combine that with the average volume that our solutions provide into a typical building.

Now for some of the markets, it's very clear and known these statistics. Next to being CCO, I'm also President of the Ventilation Association. In the Netherlands, their statistics are extremely clear. If you move a little bit further to the east of Europe, it's more challenging. But what we try to do there is with ongoing customer interviews, because the parties in the market are known and cross-correlating volumes to come to a good assessment.

As mentioned, this is not a onetime exercise. We started this already in 2023 when we started developing targeted strategies across Europe, and we try to enrich and improve the information. I think fundamentally, the key message is there is a lot of potential. The question is how do we capture that? And there, similar to what you have seen, from Matt's presentation in the first section, also Europe has an action plan encompassing geographic expansion into growth markets across Europe.

We will focus on the service business moving forward. I will talk a little bit about one of the most recent acquisitions that without any doubt, you have read about the Siber acquisition and how that helps us to grow in multifamily homes. Talk a little bit about renovation. Maybe you saw already the cube outside, if not later on over coffee, have a quick look. And I will talk a little bit about our fundamental growth levers, how we train and which customers we approach in which channels.

So let's start with the first one. Geographic expansion. On the right-hand side, you see the actual results and markets, our top markets in Europe today. And we also indicated it in the geographic map. That map in the coming years will move beyond the current greenfields, which areas are we looking at? We see a clear growing demand in the East of Europe. We saw it already coming in the South of Europe, even though the Spanish market is currently a little bit struggling, but structurally, long-term demand is clear for the Spanish market. And at the same time, in North, we have a huge expansion for servicing. I will show the share of the service later on.

But for each of these markets, we took the segmentation that you saw on the prior slide and detailed it so we can make tailored strategies. So we have a leading position in several markets, but we see growing shares, and you see it already if you look at the top 10, and you see certain markets that we will be expanding and we'll also see in the future. One example being Poland on the rise, hopefully, pretty soon, we can also mark that in the green. That's geographic expansion.

Now let's talk about service. When we talk about service, it's important to understand what types of services there are. In our industry, there's typically 2 types of services or a common definition that's being used. One is product-related services. And there, you can see filters, spare parts, commissioning services, maintenance services. But at the same time, you also have full replacement services. I will show a little bit the famous 1 million units that we have in the field where the shares are across Europe, but that provides, of course, a huge potential.

The second term, which is often used in our industry is value-adding services. And there, we start moving on to digital services. So to give you a concrete example, a ventilation solution today needs filter replacement. You can sell filters. That's one option. Number two, you could create subscription services, second option. We already offered that today. But imagine a world where we proactively monitor your unit and can advise you, this is when you need the new filter and it would automatically be sent to your home.

We are on that journey to come from classic services to slowly but surely move on to digital services, but our first top priority is expand the existing service packages that we've defined in our mature markets across Europe.

To give you a bit of a feeling, and you will see on the circle Central, Northeast, Southwest. It was not mentioned before, but to give you a feeling, within Europe, we work with regions, regions based on technology and geographical trends. At the same time, also all regions have a bit of a different recipe for the next steps moving forward. So Region Central stands for [indiscernible]. And there, of course, from a historical perspective, we have a huge installed base, and we will be expanding much more into new types of services.

If you look at the Northeast, West, South, and there, we have already quite a substantial share in North, but there, we are really looking into expanding the existing service packages that we have defined already for Region Central into these new markets. If you're a growing markets such as the East, then of course, you also need the supporting tools and processes, and that's exactly why we put on a European level, one team in place to start supporting that expansion across Europe with the proven solutions that we have.

Now out of that 1 million over the years, Matt named it already, Netherlands as one example. Of course, we've already brought replacement solutions to the market. But I am convinced based on the market intelligence that we have is that we have huge potential there for the coming years moving forward, and we need to be proactively in defining what we offer at which point in time.

So we developed an action plan across EMEA, and we are aiming for a 15% service share by 2030. Again, first based on proven packages we have today, expanding them across Europe and at the same time, making our steps into new digital services.

Then I move to value-adding acquisitions. And here, you see the case of Siber, a beautiful company that we bought in Spain. And we bought it for two reasons: one of their good positioning within Spain, but also with a clear expansion plan for multifamily homes. They have a solution which fits exactly for that target group. So 2 purposes.

About the integration, I think what we've done in the last, I think it's 12, 13, 14 months now. And what we decided to do is to do a lean integration. So really understand which activities do we want to integrate because it was a smaller company. We are a little bit bigger in size of many bigger companies. But what you don't want to do is overload the company. So there was a very clear plan what to integrate, whatnot. There was a dedicated team put in place and a very clear 100, 200-day milestones. And at the same time, we also identified that piece of the portfolio that we wanted to expand across Europe with a clear cascading of which markets first.

So far, we've already launched in Italy, Baltics and Belgium and are hitting the targets. So that makes me personally very happy as a commercial person. Then the current plans and actually, as we speak this week, we have the big launch in East to go live in 2026. So all activities have been cascaded to have this expansion across Europe. For multifamily homes, this acquisition was very important. And I think when we talk about acquisitions for the group, it always is correlated to the strategic expansion that we want to achieve.

Now when it comes to renovation, how do we approach the market on one hand, and the question came before, it's with targeted solutions. On the other hand, what is also important for us is that we get the message out there, and that goes from a multitude of channels. It's not only marketing, it's creating awareness, and it's also not a short-term campaign. This is a campaign that we will run for multiple years.

What do we do? We create, on one hand, awareness. In the second step, we start loading with knowledge articles and events. In the third step, and we already launched this in the first 2 markets, we also create lead generation tools with already the first results to make it very targeted over time to go into that market segment.

The renovation is, for example, we go also a little bit beyond. I'll give you 2 examples, one from the U.K., one from the Netherlands. We are heavily involved in the healthy homes initiative of the U.K. government, and it focuses on mold in renovation, which is unfortunately the case. And we try to influence also that regulation, which is already improving exactly in the U.K. that, that also is that regulatory environment, what Matt indicated already in his section that drives not only the business, but also fundamental change that we need to see in these markets.

Second case is that also in the Netherlands, together also with multiple parties from the market, we were heavily involved in influencing the government to focus on what the impact is for housing associations and why beyond standards on energy labels, we also need standards for a healthy indoor climate. So on one hand, structural campaigns, including lead generators at the other hand, also influence on the legislation.

Then the question came, how in Europe do you approach the market? And now I come also to 2 fundamental topics in how we go to market. We -- from back in the day through acquisitions, we had basically 3 different types of routes to market. On one hand, the classic sales via wholesalers, installers to investors, end users. We also have markets where we directly approach installers and investors. And we also have markets where -- or channels that we go straight to the end user.

So what is our strategy moving forward? If you look at the sales time spend and the sales time spend is something else and where the money flow comes from. So in the construction industry, and this picture will not be new to many of you. Normally, the financial flow goes via the wholesaler, but it's about where you spend the time and where you create the demand. So the current time spent across Europe with our sales force is shown in the pie diagram. And I think what is very important, we have tailored strategies by region on which channel we want to approach. So for example, one market that traditionally might be focused on wholesalers has set a clear target, I want to move to installers. Another market that I visited last week has a very clear focus on, I want to increase my go-to-market to architect. So by market, we define on the market characteristics, what is needed, and we direct our sales force to go exactly in that direction so that we can maximize our position.

Training, extremely important point. Training for us, we -- this is the number on European level. By market, I would have to detail and quickly look it up. But the overall number is approx 25,000 trainees. It's not something -- it's -- there's a few things going on in the market in general. On one hand, we have a lack of skilled labor force. And there's an increasingly pressure with fulfilling the needs for construction to also have a onetime right.

So it means that if we train our partners, we can reduce their time on the field because it's onetime commissioning and they know how to do it, whereas otherwise, we would have back and forth question where -- through which our partners lose time in the field, which they really don't have with the number of skilled labor force that we have across Europe.

One other trend that we see that I didn't mention before, but still would like to highlight is that due to the reduced labor force across Europe, we see an increasing need in industrialization of houses. So we see, on one hand, houses being produced in factories what we call prefab companies. And the second trend is that you see a lot of off-site construction concept, so not built in the factory, but one concept that are being rolled out across markets. And what we actively do, and that's the advantage of being a European player is that we can support across markets. So typically, Baltics, Netherlands, Poland, Romania have these kind of providers, but those installations might end up in other markets, but we can still service it if it comes from other markets into market A to market B because we have the workforce to support that. And that's one of the advantages that we have.

But coming back to training, it is very important that we train our partners, so they are effective in the field. It also gives them a value add in that sense. We have tailored trainings for the different channels, so different trainings for architects. We have different trainings for specifiers, installers. And at the same time that today, you will see it live, one of our academies. But already in the last year, we expanded -- we just recently opened up in Norway. We are going live in January with an academy in U.K., and we have an extension planned also for our locations. We have one team across Europe that provides knowledge assets that all our trainers locally can use and tailor to their specific demands.

And I think the last element I would like to mention about the academies in many of the markets, the academies, we also work with partners, meaning that, for example, in the U.K., we have a partnership with the Healthy Homes Association. So we also can certify later on people beyond our own activities into the market. So we try also together with educational facilities support there. So we currently stand at 25,000. I would like to see that number increase also with the expansion that we have planned across Europe.

In short summary, we've identified in Europe the potentials by market and made a tailored plan for each market. We will be focusing on regional expansion in those growth markets. We will expand the multifamily homes with the solutions we acquired recently. Then service business, proven packages from mature markets will be expanded across Europe at the same time that we commence in digital offerings, and we continue to focus on our go-to-market strategies and academies in line with our thought leadership.

Well, good morning, ladies and gentlemen, also from my side. I have the pleasure to use the next 30, probably a bit more, Alex, you forgive me minutes to give you a deep dive on our European residential ventilation business. And when -- at Zehnder, when we talk about residential ventilation, and we have heard it from Matthias earlier, we talk about heat recovery ventilation business. And the reason we do that and believe in that solution, you see on this slide. If you want a healthy indoor air quality and an energy-efficient building, the solution to go for is heat recovery ventilation.

Now you might say, well, it's -- I guess you're all number-driven persons. Well, how can you say that, that confident? And I just would like to mention 2 studies we did or one study we participated, the other one, another one. First, Project Buren. That's a multifamily home in Switzerland for apartments we looked at together with the University of Applied Science. We equipped all the apartments with sensors for indoor air quality, also the windows, so we could calculate for how long, how wide the windows were opened. We also knew what people were living in there.

And just to give an example of the findings there as we observed that project over the course of a full year. If you look at the air quality in the master bathroom of 2 apartments, both a couple was living in, one couple had 2 cats, the other couple only a dog -- only a dog. And we measured the hours in the air where we had CO2 concentrations above 1,000 ppm. That's considered that some ventilation is required. The air is not fresh anymore.

So in one bathroom, we had how many hours. 1,000, 2,000, 3,000, 4,000, 5,000, we had more than 5,000 hours of CO2 levels above 1,000 ppm. If you look at the other one, we only had 100 hours in a year. We are talking out of 8,600 hours, more or less.

Now what's the difference? Some might say dogs are good for indoor air quality, cats not. It's a different case. One apartment had a ventilation unit, a Comfo Q, the other one not. And I think it clearly shows if you want to have a good indoor air quality, it's a mechanical ventilation you need.

A similar study was done in the Netherlands by VHK. It's a research consultancy working a lot on behalf of the European Union together with [indiscernible]. They looked at 60 homes with different ventilation systems from window ventilation to mechanical extract ventilation, heat recovery ventilation. And they came exactly to the same conclusions. They calculated a bit different. It's a so-called MONICAIR study. They calculated the number of excess doses, CO2 you get and then also the energy consumption during the heating period. And what you clearly see as a result, the houses where you get the least amount of excess CO2 doses and which are the most energy efficient are the ones with balanced ventilation, so heat recovery ventilation while window ventilation as well as mechanical extract ventilation are positioned more in the top right.

So I think now knowing that the solution to go for is heat recovery ventilation. Why is that? And we briefly heard also from Matt that we see a strong trend towards nearly zero energy buildings. I think that's also at least on the European level, as you all know, 40% of the CO2 emissions are coming from buildings. We have a target of net zero within the next 25 years. So I have to do something about it. That's why on a European level, we drive the building standards towards this nearly zero energy building, low energy buildings, whatever you call them.

Now I think what are 2 key characteristics of a nearly zero energy building? I think first and foremost, we also have heard it's an airtight building envelope. So the building itself cannot breathe anymore. You need a long for a building, which is a mechanical ventilation system. Now probably some of you might ask, well, if it's that crystal clear, why don't we do more business? And I think that's probably also related to a rather abstract value proposition, at least at first in combination then with some limitations in knowledge about the building physics.

If I ask you, what's a good ventilation system? Well, you don't want to see it, you don't want to hear it and you don't want to feel it. We heard no draft. And for this, you pay EUR 10,000, EUR 15,000. So rather a lot for something you don't even notice at least at first. So I think that's there. It's our challenge to really drive that consciousness, the awareness of what is required to make a building forward across Europe. And I think especially in the context we have seen probably also the last 2, 3 years, I was yesterday at the summit here in Switzerland for our HVAC industry, which partner presented their study on the construction cost development over the last 10 years, which increased in Switzerland around like 25% on multifamily apartments, more than 30% on single-family home.

And this -- even though we didn't see much of inflation in Switzerland compared to our neighboring countries. So in that context, it's a lot of money, and we have seen certain challenges that also convincing really to make the ventilation system being installed. I think if I look at recent developments, I'm positive that this will at least in the mid- to long-term change. Just to give you 3 examples. If we look at the EPBDs, the energy performance of building directives, that's the framework on the European Union driving the construction or the building regulations. They were revised last year and for the first time, we managed to get the indoor environmental quality into them as a pillar, a key pillar for a sustainable and healthy home.

So on a European level, we have recognized we just cannot have airtight building envelope, high insulation and the heat pump, we need something more that the building works. And now it's up to the member states to implement this in their own countries over the next couple of years. Another example, and this is on a global scale, I think many of us remember a few months ago in New York, United Nations, the general assembly, there was an initiative of 130 corporations, universities, NGOs placing a pledge for healthy indoor air quality. I think it's the first time that on a global scale, it's the drive to make healthy indoor air quality a public topic and really driving towards that goal on a global scale.

And the last example, a third one, I don't know whether we have anyone from U.K. in here. A few weeks ago, end of October, the so-called Awaab's Law came into place. Not sure whether you have heard of it. It has a tragic beginning as it's the consequence of the death of a 2-year-old Awaab Ishak, that's where the name is coming from, who died because of continuous mould exposure. So he was in a flat without ventilation. They had mould continuous and got infected and died. And this Awaab's Law makes actually now the landlords accountable for the building's health. They cannot blame the tenants anymore that it's because they are not ventilating or whatever. And it puts quite strict deadlines on how you have to respond to inquiries or complaints, acknowledging within 24 hours, 3 days, to investigate, 10 days to find a solution.

And I think that's also what we see in the U.K. when we look at the market, which has been a very positive market so far as this was expected, this law comes into force. We see a strong growth within ventilation. And also if you look at the different ventilation segments, an upgrade towards higher quality systems. So from single point ventilations, the ones you know from the bathrooms, which only run when you have the light on to continuous mechanical extract ventilation and from this even into heat recovery ventilation. So overall, it takes time. Sometimes it's a bit of bumpy road, but I think especially also what we have seen now in the last years, the awareness is increasing. And with this, we also are confident that over the years, the adoption rate of heat recovery ventilation should drive hopefully also our business.

Now what's about the first airtight? Coming back to my initial questions, the 2 characteristics of nearly 0 energy buildings. The second one, good insulation. If you look at these buildings, I mean, coming from Switzerland, where traditionally, you have heating as a key topic during wintertime. If you talk of a passive standard low energy, you usually have 10 watts per square meter peak load you should have. So if you have a 100 square meter flat, it's 1 kilowatt. This is equal to a hair dryer. So with a hair dryer, you can heat throughout the winter your apartment. Or in other words, if you look at ourselves, each and every one of us uses small radiators. So we have 60 to 100 watts of heat we emit, meaning you need probably 7, 8 people put it in that department and you won't need to heat it anymore.

If I look at us here, we have probably 4, 5 kilowatts of heating power. That's why we have [air con] and the ceiling activated to keep the temperature at a good level. So we have only a few months left with limited requirement for energy. And in combination, I think that's also what has been in the headlights all over. Just a few weeks ago, I also published a study about the global warming, the trend. So we don't need much energy for heating anymore. Heating is probably required November, December, January, February. And then as of April, May, you have another topic, cooling, which is also now north of the ops, something we have to deal with.

And especially also look at office buildings, a lot of people inside, the laptops, et cetera, the load you have on those. So as of May, you usually start cooling those buildings until September. So this becomes not only in commercial, but more and more also in residential building a topic. And I'll come back to that later on how we try to leverage on that trend.

Now coming to the second part, a bit more our offering, what we have been doing and are doing going forward. Sorry, I was a bit slow. I think I won't spend too much time on that. We have later on also in the Academy time to look at our products. I think in general, we have a rather wide product offering, really targeting the residential ventilation business where we really can, depending on the requirements, offer a good solution. And it's not only heat recovery ventilation as we see up here, it's also extract ventilation. Especially in 2 markets, we are actually quite strong also in extract ventilation market.

With the acquisition of Caladair, we also entered the commercial air handling unit market, different market, a big market, probably more stable. And then also filters, we have heard part of our service business. We did an acquisition also a few years ago, [Filter], which really gives us everything it takes to develop the filter business where we, on one side, see a lot of potential on our installed base, but it's also an interesting market by itself.

Now looking a bit more in depth of our product portfolio, and I think we have heard it before. We try to differentiate through the value of our products and systems. We are not a price fighter. But we really want to differentiate. We have heard thought leadership lead the way. And I think a perfect example of what we mean by that is the ComfoAir Q. It's an oldie, but still a very successful unit. And actually, if you look also at the growth we are experiencing at the moment, this unit is one of the important drivers behind the growth.

Now why? And I think it's still a benchmark in terms of [indiscernible] ventilation unit. It's a champion in stakeholder management. We have [indiscernible] we have the wholesalers. They are interested in few numbers -- SKU numbers. You have left, right version in one. So you cut the stock keeping units by half just by that. We have the installers. They want easy commissioning, installation. Guided commissioning is still best-in-class. We have the end users. They don't want noise, energy efficiency, best-in-class. We have obviously the specifiers, we have heard that crucial part which are also interested in this. So there, we really manage to satisfy all the different stakeholders in a way that they are coming back and stick to this unit and thrive the growth.

Now we remember what we just discussed before. Nearly zero energy buildings, you need ventilation due to the air type building envelope and you need little heating and you need cooling, and that's what we did here. We have our core, the heat recovery ventilation unit. That's our core competence. We build on this. We had the so-called ComfoClime. It's an air-to-air heat pump reversible where we can in summer cool the supplier. So we blow into the flat at 15 degrees, for example. In winter, we can blow in at 55 degrees.

And to complete the complete system, we have developed a fully insulated air distribution to avoid any risk of condensation or whatever in summer. And as you also have heard from Matthias and my example before, nowadays for heating, you need 1, 2 kilowatts. That's what we can bring through the air. So we have first examples. We also have field studies in Italy of a passive house where the only system for ventilation, heating and cooling this ComfoClime system is where we can ensure a comfortable indoor air quality and climate throughout the year. Now it's not from today to tomorrow. It takes time. We have heard specifiers. The decision-makers are crucial, and that's now our job to really convince them, explain them and get those new systems into the market.

Now we have talked about our product systems. And I would like to highlight briefly also innovation as we spend quite some money on product development. You have seen a brochure on your desk with what we have been doing and launching in the last few years. And I would like to highlight 3 examples of systems we have been developing and highlighting in the last year.

I start with the ComfoDuct Activo. Now what's that for? We have heard renovation is a market we want to grow, not that easy due to the framework you have to deal in and one of the challenges we face there is we have our fresh air and we have heard air distribution. We usually distribute the air in tubes to the rooms. Now to get those tubes in, that's a lot of work. You need to open all the walls, put in the tubes, put -- close them again. Can't we find a way where we don't need to use tubes to distribute the air. And that's exactly an active overflow element we see here. So we bring in the fresh air centrally, which is usually easy. Especially if you also look at the floor maps of all houses, you have a central corridor and from there, you have the different rooms. And then we use this overflow element to get the fresh air into the single rooms.

If we look at this product, and I think it's -- we are not the only one doing it, but we took a new approach to it. We use different kind of fans, which are more efficient and less noisy. So instead of actual fans, we have a centrifugal fan. We have used new materials, a foam, which is mainly used in automotive, which has very good sound damping characteristics, and we have managed to get it from a size-wise in a design that you can flush-mount it within an 8, 10 centimeter wall. So all you see is the 2 grills. So I think a nice product.

Now obviously, you're interested to see how much sales we generate. We don't talk about specific sales numbers. But I think we can say we are not there where we want to be. It takes time. We launched it 3 years ago. But a few weeks or 3 months ago, for the first time, I got a prescription on my desk of a project here in Switzerland, new build, where we have several hundreds of those in the prescription. So we still have hope and we keep going to also get those nice products out in the market and increase our share in renovation.

The second example is the ComfoVar Aero. That's a variable airflow regulator. So if you have a multifamily house, 50 flats, you still want to have the possibility to get the airflow per apartment. So you use this one. In the end, it's a valve opening or closing, so you get more or less air. And it's actually quite a competitive and existing markets, several 10 thousands alone in Switzerland where all have the same solution. It's a sheet metal box, 2 valves controls on it and then you ship it. But there, we also took a completely different approach.

First of all, from the design side, we split supply and extract there. This gives full flexibility. We moved from sheet metal into, let's say, EPP plastics, which gives us from a material scalable point of view, an advantage. And we developed also patented a new valve, which is a so-called ball valve, which has very nice properties as we have a linear airflow, not creating any turbulences. And with this, we have much lower noise levels, which is always a concern of the people living there. By the way, it's also a few years, we also have seen that we are not the only one liking that idea. There is a SkyFlow, for example, at least from a look and feel, looks like this, obviously, has not our technology.

And last but not least, I would like to highlight the ComfoFit100. It's a so-called semicentral unit targeting especially multifamily homes. And in multifamily homes, we have heard before the questions, what's the difference? Usually, they are smaller, and we actually see in our trends towards smaller apartments again, so you need less air. And since they are smaller, you also don't have space for a lot of technical installations. So you need to be compact. And that's exactly what this unit is doing.

We can bring a 100 cubic of fresh air in an hour. Usually, as a rule of thumb, you have 30 cubics per person. So we can cover up to 2 bedroom flats with this studio 1, 2-bedroom flats, which is a considerable market. And you have full flexibility in terms of installation. You can put it on the ceiling, you can put it on wall or in wall. And with this, we have also a solution now really addressing the multifamily home market, which then obviously is slightly different compared to single-family home as it's also much more specifier driven, which you do not really have in the single-family home.

And again, here, launched 3 years ago, we learned earlier this year that the idea was appealing also to certain competitors, which presented that ISHA prototype to be launched next year. So I hope we really make use of our head start. Taking one step back in terms of innovation and where we focus on. And I think there we have 3 areas we deal. And we have seen we have a big product portfolio. Obviously, this requires quite some maintenance. So that's where we upgrade products. We have end-of-life components and especially a few years back, probably some of you remember, there was quite some challenges in the electronic market to get components where we spent an awful lot of time to find replacements on component level in order to keep our production running.

Then we have the so-called technology area. There we work also a lot with external parties. There, it's all about finding new materials, new technologies, which we can use in our product solutions. Now as you have heard, in the end, we have the topic noise, we have the energy efficiency of the fans, we have the heat recovery and we have the size. And unfortunately, these are contradicting. The smaller the unit, the higher the noise and the lower the efficiency, the bigger the unit. So you need to find a compromise. So we are looking at new materials. I mentioned before the overflow element with the foam we have used, which are sound damping, which we can use in our products.

Another topic we are looking in is all the electronics controls together with IoT connectivity that we easily integrate into smart home systems, where we are on the way to develop a complete new platform for all our products. Last topic which we have been or still are working intensely is automation, especially in our assemblies. We have had quite some external collaboration with universities there as well as we were developing a set of tools and methods on how we can later on use the automation robots in our assembly line. And this obviously also had an impact on our design, which is now ongoing in the development organization, the design for automation that we can later on take the next steps.

And then last but not least, probably the most important part, what we have seen, what I talked, the new product development. We are not short of ideas, and we are working on nice, hopefully, good projects. We want them also to present the latest in Frankfurt at the ISH, the lead fair for HVAC in '27 early. Good. That's much about the innovation.

Coming to the last part, our operational backbone, the footprint. You see briefly the overview of all the locations we have. I don't know whether some of you remembers our last Capital Market Day, which was many years ago up in [indiscernible], where we have the biggest location, a well-invested plant where we produce all the heat recovery ventilation units, where we also have all the development team, the lab. Then we have in Lar, a team, which we also have been growing. It used to be only air distribution.

Now we also have established a team for decentral heat recovery ventilation development which is mainly a German market, so to be close to the market and the customers there. Then we have a team in Campogalliano, that's newly established in the last 5, 6 years. On one side, they have been bringing up all the climatic ventilation devices and hopefully also some more to come, you have seen. And on the other side, we have established there our electronics team software development for this new platform, but they also were obviously doing the control algorithms for our climatic ventilation systems so far.

Porvoo in Finland, that's a small location, mainly for the Finnish and Norwegian markets, again with the acquisition of Enervent many years back. We have new Maidstone. Last time it was still Lenham. I think 3 years ago, probably we moved into a new location, close to the old one, but twice the size. And at the same time, we started to renew all the machine park we have there. And I think I'm quite proud of the team there. If I look back at in the last 3 years, we managed to triple revenue out of that factory and are actually now already optimizing the space in order to be ready to grow further.

And last but not least, we have [indiscernible] Caladair, the acquisition we did in France, also a very nice plant, not too old, well invested. And there, we also have the whole commercial business, the air handling unit business, also a good year so far. And there, we are also working on how we can extend the capacity further. And coming to an end of my part, and I think that's the nice part, if you look at the ventilation business, it's primarily a people business. You need to know -- you need to have the right engineers. You need to know the right people on sales side, the specifiers, installers in sales in how we see the market and develop the units. And it's not that much about how much capital you have, although we need capital as well.

But the primary part, what we do is really assembly. So it's subassembly, assembly and then a crucial part, quality assurance testing of each and every single unit. Then we have 2 production parts, I would consider production on one side in France. It's the sheet metal bowing. So we have punching, cutting, shearing to build the casing of air handling units. And as just mentioned before, we have in Maidstone now, we have the whole injection moulding where we do the plastics parts. For Lar, also more and more for [indiscernible], but there is always -- if they want to get the order, they need to be better than the external injection moulders. That's a way to keep us fit and agile. And at the same time, we manage hopefully, to extend the space to keep up with the growth. Good. That's it from my part.

So a few words about myself before I start. My name is Patrik, I'm from Sweden, worked for Zehnder for 8 years and spent 20 years before that in the chemical and coatings industry. So I'm very happy that I'm here to talk about cleaner solutions with you today. This is a small activity, but an extremely interesting activity that we have. In the next 30 minutes you will hear me talk about -- a lot about particles, about find dust, about particulates. It might sound quite boring to start with. I'm going to try to make you as excited about this business as I am by the end of the 30 minutes. So hold on to that.

You will see in this presentation, I've added a number of pictures from our customers. You can see how we install our equipment. If you're interested, on our website, you will find in a library 40 to 50 such cases. I personally find it very interesting because it gives you a flavor for our business. Each business case sees why the customer choose us and what the benefits, what -- how we help them. So you will see the wide array of different kinds of customer we have. So I would encourage you to have a look there. You don't need to look at all of them, pick 2, 3, 4, 5, ones that you think sound interesting. And just by browsing through the descriptions, you will see what our business is all about, if you haven't understood it in detail after my presentation here today.

So to set the stage first, what are we talking about? Clean Air Solutions, we are one of the smallest activities or divisions within Zehnder Group. We're 10% of the overall ventilation business. We have activities in Europe, and North America. And we are very independent. I think Matthias said it in the beginning, we are a company and company. We are very independent and that's for a good reason because what we do is very different from the rest of the ventilation business.

First of all, we focus on industrial customers. We -- our products are different. Also how we sell our channel to market is different, and we sell a service and not a product. So that makes us very special within Zehnder Group. So within Zehnder Clean Air Solutions, we have -- within our organization, we have everything we need to do business. We have the production, R&D, sales, marketing, logistics, everything is in there. So that makes us a little bit special.

Why is Clean Air Solutions such an interesting business? First of all, what we do is product as a service. So it's one of these buzzwords since, I would say, 5 or 7 years. Everyone talks about product as a -- service as a business or product as a service. But very few are really doing it all in. There are some great examples. The companies have really taken the step and a lot of them are trying out and doing it. We are really doing it. This is 100% of our business. We are only selling services, even if we are producing equipment. So we produce the air cleaners, the one you see on this picture here. We produce air filters.

We have an own patented filter that we use as a prefilter in almost all of our installation. But we don't sell it. So we don't sell anything. It's all in a subscription that we offer to our customers. So they are paying a monthly fee, and we clean the air in their production, in their logistics facilities, wherever they want us to clean it. It's not a new business. We've been building this. We've been very busy over the last decade. We build this really step by step. We have by now more than 3,000 active customers on service contracts in more than 20 countries.

And we do everything ourselves. We do it -- we go directly to the end user. We don't have agents or wholesalers or distributors in between. We go directly to the end users, and we use our own people to do so in the sales function, but also in the service function since we're selling a service. We're doing it all with our own people, and that allows us to control everything from beginning to end in delivering the service to our customers. And this helps us really to deliver. We have consistently been delivering an above-average growth for the past decade and above-average EBIT margins.

So where do you find us or where do customers call and get in touch with us? Particulate matter or airborne dust in general, it's a big matter and it's very, very often underestimated by a lot of customers. We tend to group and say, okay, what are the triggering factors why customers need our help. Number one, product quality. And here, the keyword is contamination. You see it here in the picture, this is one of our customers. You have a big hole. You have different kinds of production steps. I think this is plastic foil manufacturers that are also printing on the foils. You have activities in one area that is creating dust, and we just learned it over in the demonstration just now, warm air rises if it's from machines or it's from people, if you have dust somewhere in a big hall, that dust will go all over, which means you have something you're doing in the corner and that can contaminate what you're doing far, far away from that.

And this can be in the food industry, food and beverages is a big area for our customers, but it can be in a lot of other things as well. I think construction industry where you're mixing or doing things. The other triggering factor is process stability. As companies are automizing, digitalizing, equipment is becoming more and more sensitive. You have more sensors. The smallest thing can cause equipment to malfunction. We have customers who even hold production lines and coming to standstill. That's a lot of money. For some of our customers, if the production line stands for 5 minutes, it cost them thousands and thousands of euros or Swiss francs. So here, they are coming in and asking for our help to see how can we make sure that, that is not happening.

And the third area is employee health and safety. And the biggest danger with dust or fine dust is when you inhale it. It can cause a lot of various health issues. So when it comes to companies that want to attract and retain good people in the organization to take care of the indoor air climate, make sure the air their employees are breathing, that is safe, that's a big issue for them. It can be that they have a lot of absenteeism. So people are calling in sick because of the unhealthy air they have. So that's also a driving factor for our business.

When we come into customers, sometimes it's not just one of these things. They are -- they have a product quality or contamination issue and they have employees complaining about the work environment. And that's for us, that's kind of a home run. It's very easy for us then to find a solution. Very often, the driver is not a legislation. It's because it makes business sense. A lot of these things is very easy. You have a contamination issue and that happens 5 times a year. Each quality complaint or product recall cost you $100,000. That's $0.5 million. If we come in with a solution that costs a fraction of that, and we can reduce that claim rate or product quality rate with 80%. it's a clear business case. It's easy for the customers to say, this sounds like a really good idea to go with.

When it comes to air pollution in general, like I said previously, it's very often very underestimated by many, many companies. When you look at statistics, it's one of the largest factors for early deaths and people are not aware of it. We think very often also about the outdoor. We think about the polluted big cities in Asia or South America, but we don't think about the indoor air climate, especially not where we're spending 8 to 10 hours a day, namely work. And the thing is it doesn't really matter what the dust is or what the particle is. It's a size and amount that is creating a danger.

We often like to talk and use, what we call, particulate matter, and we talk about PM10. These are particles that have a diameter of 10 micrometers or smaller. The human body have good filters. If we breathe through our nose, we have a good filter here. That catches normally the PM10 dust, but not what is smaller. So if you have large dust particles that we are breathing in, we can see it. We can have a sore throat. It's getting stuck here. We can have runny eyes. These are the, I would say, easy particles. The smaller ones are really dangerous.

And like I said, it doesn't matter what it is. It's a size and the amount, which means if it's smaller than PM10, normally, our filters in the nose and throat doesn't catch it, it goes into the lung. You see on the slide here, it can cause a lot of different kinds of health implications. When it's smaller than 2.5 micrometer, it can cross the air blood barrier. It gets into our blood and then it goes up and down. It can affect and it can accumulate in all our inner organs, it can even go into the brain. So the smaller the particle, the more dangerous they are.

And the thing is you have dust everywhere and a lot of companies are not aware of the problem. We like to say that the issues are created through different -- coming from different reasons. One is the manufacturing process. A lot of companies have manufacturing processes where the process itself is creating the fine dust. You see here it's a welding site. You see fumes. Fumes is nothing but very small dust particles. You see here in this case, in the picture behind me, you see a welder. He's protecting himself. He's got fresh air flow coming in. But what about the people that are not standing right there, that are working doing something else around him. They're breathing in this dust and that's really, really dangerous.

And that could be here. So any -- you can think of any process where you're cutting, where you are grinding, where you're welding, that process is creating the dust. It's natural. You cannot do it without the creation of dust. The other area we have is where companies are working with powder substances. Very common in the food industry, if it's a bakery or if it's where you are making snacks and you're putting all the tasty flavorings on top, it's all powders. But it's also mixing in the construction industry where you are mixing things.

I'm coming from the chemical industry. If processes are not housed in, so if they're open where you're mixing and there are a lot of companies that are still mixing by hand, you have dust. And it's really, really dangerous for those people that are working for extended period of times in such environments. And then we have example of where the pure activity in the building is creating a problem. And here as an example, we have a lot of business in warehouses and logistics. Every time when the gates are opened and they get a delivery, all that dust, all that stuff that is in the truck that is delivering that is coming in.

You're moving goods, all that is coming into your plant and it's being carried all over your plant or your warehouse. You're cutting paperboards. You have paper dust that is going up. You have 4 cllif trucks that are moving about 90% of the case or even more, they have rubber wheels. That rubber, as they're going around just like your car wheels are slightly being brazed, that dust is spreading with the activity where you're going around. And that is inhaled by the people working there. It goes on all the goods. And that's -- so here it's also employee health. It's also a large or very high cleaning cost to take care of it if you don't have a system like Clean Air solutions in place.

So when I look at our business, 80% of our growth. And we're growing since a decade, we're growing double digit organically. 80% of our growth is coming from new customers. So customers that never had a similar system installed before. So when we get in touch with them, it's the first time for them to start thinking about such a solution. So when it comes to us to generate business and our business is a lot about business development. Step number one, we need to create awareness because most companies never heard of it, they never thought about in their mind, there is not such a solution or they have not been looking for it.

So we need to create awareness of the problem first. When we have awareness, next step is lead generation. Then we start to get specific, then we start, okay, woodworking industry. Are you aware of these and these issues? Are you aware of how we -- how there are solutions out there? So we're kind of throwing out the line, the fishing line and see who is interested in it. And those companies that then are reacting and say, okay, let's have a talk, then we're in there. And then it's really about specifically together with the customer going through validating their needs to see, okay, what is the problem, what are the possible solutions we can have and what is the payoff.

So for us, it's always a one-to-one. Even if we have standardized product in the background, every solution is customized because every production hall or logistics hall is different. They have different ventilation systems. They have different goods, there are different production methods. They have different problems. So we try to adapt our solution to every single customer. So what it all comes down to is that we are adapting it. And that means that we are the ones together with the customer that discuss and suggest what kind of product solution do we have or do we propose? What kind of air cleaners, what size, where to install them? What kind of filter? You have 1, 2, 3-step filtration, which kind of filter in each step.

We take care of the installations. We also discuss where is the best way to install them, where are the dust sources in a building? How often do we want to change the filters? We take care of it, but we agree with the customer. We'll come by every 2, every 3, every 4 months and we do it. So also there, we're really getting into the details together with the customer. It's a very straightforward approach. It can be extremely quick. We like the quick business. So really identify the problem, work out the solution, install it and then get the confirmation from the customer that Zehnder has made a difference. And this approach helps us. We win new customers every single day, new customers that never had a similar solution in place before.

For the customer, there are almost only advantages. First of all, it's an all-inclusive service. Yes, it's not an on-demand. It's there. We take care of everything. We keep our customers happy because if they are not happy, they will cancel the contract with us, and they can. So it ensures that we are on our toes every single day. Our system is a very quick and easy retrofit solution. We normally come in when the customer already have a problem. We're not in the project phase. We don't talk to architects and planners and all that. We come in when there's a problem, and we help the customers to fix it. And the best way is -- and we have customers really also confirming we've installed our equipment, the next day, they see the difference.

So it's very straightforward and quick and easy, and that's also because Zehnder is in this case, we are the specifier. The customer doesn't know what kind of equipment and what kind of filters they need. We have 3,000 existing customers. We are pretty good at finding the right solution. So we are specifying it, what kind of equipment, how to do it? We are producing it. We're installing it. We own it. We own all the equipment, install at all our customers, and we service it. And that makes it also easy. If any of these steps are not to the satisfaction of our customers, it's Zehnder. We're one call away, we take care of it. That's our service concept.

So also for the customers, it's very risk-free. There's no big investments. If it doesn't work, they can cancel the contract. And it's also very flexible because we know that companies are growing. In some cases, companies are shrinking, sometimes they have to shut down their operation. We can adapt or we do adapt our solution all the time. We'll come in and say, okay, you started another shift. Let's see how we might have to adjust our installation here. You've changed your production. Let's see how we need to refit it and change it. We need to change the filter configuration or in some cases, they are struggling and we say, okay, we can reduce it. We don't need to change the filters as often anymore because you have reduced your activity and that way you can save money. So it's very much partnering on a daily basis.

If a customer says, okay, I need to shut down my production. I don't need the air cleaning anymore or if something is broken or so, first of all, we repair it, we reuse it, we refurbish and we recycle all the return units. We don't do this because of sustainability. Sustainability is a great side effect of this. We've been doing this long before people started to talk about sustainability. We do it because it makes -- it financially makes a lot of sense. So if we look into the future, nice thing about our business is the business potential is almost unlimited because we can have potential customer left and right.

The business model, like I said, we've been doing this for quite some time. Things you need to test and try and improve, but I think we have something that is quite good, meanwhile. And best of all, it's scalable. We have it in our organization. We're trying to be as close as we can to our customers. So everything that's customer-facing, we do locally. We have local teams in all the countries where we are. Everything in the background, we do centrally. We do one marketing, one pricing, one production, one logistics set up. We have the same offering in all countries. So we're trying really to make things easy in the background, and that makes it easier for us to scale it and also expand.

Our business, we don't have large dependencies neither on single industries, single countries or single customers. We learned this. We saw it when we were right in the middle of corona crisis. There was a big advantage for the business because some industries completely shut down, and we could just move focus and try to compensate it with other businesses. The customer base we have is extensive. Like I said, 3,000 customers in a number of various market segments, and we're growing with our existing customer base. There's plenty of upselling potential with our existing customers.

Growth trajectory, we've been doing this. We've been growing double digits for the last decade. We've proven that the business model works. Market potential, like I said, the addressable market is large. We just need to select those things where we see the biggest short-term potential. And that might switch from year-to-year from country to country. The way we grow is on the one hand side, in our main markets, the large markets like Germany, U.K. or the U.S., we're talking about increasing sales density. So as we're growing, we make sales territory smaller, we can increase efficiency and we can generate more growth by hiring, expanding our sales organization, but we're also going into new regions, new territories. Mainly in Europe, it's going eastward and South and in the U.S. it's going westward. So we have plenty of expansion opportunities there as well.

And we have a constant inflow of new business coming in. So it's a very positive business with a great future. My last slide, I think this is really a business that is strongly positioned for future growth. We're still very small, but we're doing it step by step, we're changing that. I'm not sure if you noticed in my presentation, I haven't shown any detail on products. I haven't gone into specifications. In our business, that's almost irrelevant. We're solving customer problems. The customer trust us to come up with the best solution for their problems. If it doesn't bring -- if we don't meet their expectations, it doesn't matter what the technical specifications are. They will cancel the contract and we're out.

Thank you. Financial insights. I'm pleased to walk you through the financial insights behind our performance and also priorities. I would like to start with a brief recap of the performance in the first 6 months. We were able to achieve a double-digit growth driven by ventilation, organic growth, but also through the acquisition of Siber. The EBIT increased significantly to EUR 32.7 million, mainly due to the higher volume and also due to cost reduction on the radiator side. We also had a strong focus on cash generation that is reflected by an increase of 60% of the operating cash flow.

The net income was more than tripled, thanks to the EBIT improvement and also thanks due to the absence of one-off costs in the first 6 months. Our equity ratio is still above 50% despite of the acquisition of Siber in July 2024. Our ventilation business achieved a double-digit EBIT margin despite of investment in innovation, as mentioned by Johannes and also expansion markets mentioned by Dorien. And again, the Cleaner Solutions business is above this average of the ventilation segment.

Also the growth in the first 6 months in the ventilation business was significant with 24%. Organically, it was 15%. We also achieved a double-digit EBIT margin in the last few years where the market environment was weak, and we invested further to strengthen our position. Here, we see the development of sales and EBIT adjusted over the last 7 years. We were able to increase the EBIT margin between 2018 to 2021 to nearly 10%. In 2023 and 2024, the market environment was challenging. And we also used this phase to strengthen our foundation and to make our homework to strengthen our competitiveness. And I think we have proven in the first 6 months that these measures taken in the last few years, but also the better market environment helped us to significantly improve our performance and recover.

Capital allocation. We have a clear and consistent capital allocation in place. We mainly have 2 areas. On one side, it's the ventilation business, organic growth through market expansion, through innovation and the other side through add-on or bolt-on acquisition, as already mentioned by Matt. And then the other part is return to shareholders. We have a profit-oriented dividend policy that we pay between 30% to 50% of our net income as dividend to our shareholders. How does it look in figures? In the last 5 years, we paid EUR 118 million to our shareholders, dividends, but also share buyback program, and we invested EUR 180 million in acquisition. That was mainly 2 years, 2022, it was the acquisition of Lifebreath area in Canada. And then last year, it was the acquisition of Siber in Spain.

In these 5 years, we generated an operating cash flow of EUR 383 million, and we also invested with more than EUR 100 million in CapEx. Mid of the year, we had a small net debt, and I can say now we are net cash again. And in addition, we have a syndicated credit facility in place of EUR 150 million. So we have the necessary flexibility if we see opportunities to further develop the business.

Then regarding M&A, bolt-on or the value-generating add-on acquisition, many speak about the 3 fits. Of course, it must be a strategic fit on the ventilation side, explained by my colleagues in the sessions before, then we also need a financial fit regarding possible sales growth, but also profitability level and also the cultural fit is important regarding risks that are involved in the possible transaction. At the end, the biggest asset are mainly the people in the company, and that is also connected to the culture if there's a fit together.

From the size, what is add-on, we speak about 0 to 200 million [cells]. And for us, the sweet spot is between EUR 20 million and EUR 80 million. And why not EUR 10 million or EUR 5 million? If it's too small, then it's often a lot of efforts at the end for a small impact. And if it's getting bigger, it's also connected with more risks. And at the end, it's our ambition to have a self-financing over the longer period. And so there, we also have some limitation.

Region. Clearly, Europe and North America and from the focus areas, it can be market or technology and different areas were covered in the session before. So we speak about energy-efficient products, speak about heat recovery, air treatment, air filtration, air distribution solution, energy-efficient cooling and heating, also HVAC control technologies.

Outlook 2025. So the year is nearly going to the end. We communicated our guidance for this year together with the half year result. So it's unchanged. We expect the sales level between EUR 740 million to EUR 770 million and to bring that in context of last year, last year, we achieved EUR 706 million. So we'll have a clear growth in 2025. Also on the profitability side, the first 6 months, we achieved 8.5% EBIT margin, and that is also the guidance for the full year. And also here, last year, it was EUR 50 million or 7.1% EBIT margin. So also on this side, it will be a clear improvement compared to last year.

So it shows that the measures taken have a positive impact now in 2025. Also the long-term targets remain. At the end, it's a balance between growth, investment and also profitability. On the sales side, we have an ambition to have a CAGR of 5% coming from the ventilation growth in different areas, product, but also services that we develop, market expansion and so on. And then on the EBIT side, it's also unchanged 9% to 11% EBIT margin, mainly driven by the ventilation share increase of the total sales, but we also have an operating leverage on the Radiator segment where we have taken a lot of measures to bring down the breakeven point to benefit if we have additional volumes.

And also the balance sheet is important for the capital -- return on capital invested. So we have a ROCE target of above 20%. On one side, it should come from the better profitability. On the other side, we also shift our business to a more asset-light. That means ventilation, assembly, but also the service business is clearly more asset-light than radiator production. So I'm convinced that we have a sound strategy to have a positive development in the next few years and that we can also create value for our shareholders.