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Introduction & Market Context
Systemair AB (SYSR) presented its Q1 2025/26 results on August 28, 2025, revealing organic growth across most regions despite challenging market conditions. The ventilation systems manufacturer’s stock fell 3.62% following the presentation, as investors responded to the company’s declining margins despite sales growth.
The Sweden-based company, established in 1974 and listed on NASDAQ OMX Nordic Exchange since 2007, has maintained its global expansion strategy with strategic acquisitions and facility investments, even as profitability metrics showed some pressure compared to previous quarters.
As shown in the following overview of Systemair’s global presence and business scale:
Quarterly Performance Highlights
Systemair reported net sales of SEK 3,094 million for Q1 2025/26, representing a slight decrease of 0.6% compared to the same period last year. However, organic growth was positive at 5.7%, with currency effects (-6.3%) accounting for the overall decline. The company saw organic growth in all regions except Eastern Europe, where challenging market conditions persisted.
The following chart illustrates Systemair’s net sales performance over recent quarters:
Breaking down the growth components further, we can see how currency effects significantly impacted the overall performance:
Geographically, Systemair’s performance varied across regions. The Nordic region and Western Europe showed positive organic growth of 6.4% and 5.8% respectively. Eastern Europe & CIS was the only region with negative organic growth (-0.7%). The Middle East, Asia, Australia, and Africa region demonstrated the strongest organic growth at 14.3%, though currency effects reduced the overall growth figure to -0.4%.
Detailed Financial Analysis
Systemair’s profitability metrics showed some pressure during the quarter. The adjusted operating profit was SEK 288.2 million, with an adjusted operating margin of 9.3%, down from 9.8% in the same quarter last year. The gross margin stood at 36.4%, while selling and administration expenses increased by SEK 28.5 million.
The following chart shows the trend in adjusted operating profit and margin:
Profit after tax continued its downward trend, reaching SEK 193 million for the quarter, compared to SEK 210 million in Q1 2024/25 and SEK 242 million in Q1 2023/24. Net financial items amounted to SEK -2.7 million, with currency effects resulting in a net positive impact of SEK 12.4 million, partially offset by interest expenses of SEK 12.4 million.
On a more positive note, Systemair’s cash flow performance improved compared to the previous year. Cash flow from operating activities was SEK 309.7 million, and free cash flow increased to SEK 108.4 million from SEK 91.3 million in the previous year. The company also reduced its net debt to SEK 830.5 million from SEK 1,056.3 million a year earlier, improving its adjusted leverage ratio to 0.52 from 0.74.
The following table provides a comprehensive view of the cash flow analysis:
Strategic Initiatives
Systemair continued to execute its global expansion strategy with key strategic initiatives during the quarter. The company acquired NADI Airtechnics Ltd., an industrial fan manufacturer based in Chennai, India. With annual revenues exceeding EUR 13.5 million and 220 employees, this acquisition strengthens Systemair’s position in the growing Indian market and expands its industrial fan portfolio.
As shown in the following overview of the NADI acquisition:
In another significant development, Systemair announced the establishment of a new production facility in Modon Industrial City, Saudi Arabia. The 13,500 m² plant is scheduled to launch in October 2025, with full-scale production beginning in January 2026. This investment aims to meet growing demand in the Saudi Arabian market and strengthen the company’s presence in the Middle East region.
The following image shows the planned facility in Saudi Arabia:
Systemair also secured several notable projects during the quarter, including ventilation solutions for the Stockholm Metro Blue Line extension, which will include seven new stations scheduled to open in 2030. The company will provide Jet Fans and Axial Fans for emergency and tunnel ventilation.
Additionally, Systemair is involved in sustainable swimming pool projects in Sweden and Slovenia, showcasing its focus on energy-efficient solutions. The Swedish project features 30-40% less concrete to reduce CO2 footprint and incorporates more wood in the construction.
Forward-Looking Statements
Despite the challenging market environment, Systemair maintains a positive outlook based on its diversified geographic presence. The company’s market distribution provides resilience against regional downturns, with Western Europe representing 46% of sales, followed by the Nordic region (14%), Eastern Europe & CIS (13%), North America (12%), and other markets (15%).
As illustrated in the following market distribution chart:
The company’s strategic acquisitions and facility investments indicate confidence in future growth opportunities, particularly in emerging markets like India and Saudi Arabia. The expansion of production capacity in Saudi Arabia positions Systemair to capitalize on growing demand in the Middle East region.
While Systemair faces headwinds from currency fluctuations and increased operating expenses, its improved cash flow and reduced debt levels provide financial flexibility to pursue its growth strategy. The company’s focus on sustainable and energy-efficient ventilation solutions also aligns with global trends toward green building practices, potentially opening new market opportunities.
Full presentation:
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