Ariston Group: Structural challenges in end-markets and risk on M&A execution to keep a lid on valuation; initiate at UW, €3.1 PT

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Ariston Group: Structural challenges in end-markets and risk on M&A execution to keep a lid on valuation; initiate at UW, €3.1 PT

Barclays | Ariston Group

headwinds for the heat pump industry) - which stands considerably below +9% CAGR

suggested by European Heat Pump association earlier in April this year. We also note the our

demand forecasts stand below Ariston's MT organic sales growth target of mid-single-digit

growth and Nibe's organic sales growth target of 10%.

• Market shares: The European Commission estimates that the heat pump industry's

manufacturing capacity in Europe stood at 7.7m units, which is sufficient to supply if all the

boiler sales were to be replaced with heat pumps starting today. With the current demand

level below 3.0 million units, we see significant scope for competition among the domestic

manufacturers. At the same time, as highlighted in our recent report (link), Heat pump

exports from China grew 92.5% y/y in February 2026, logging the strongest y/y growth since

January 2023, and could see extended strength on the need for energy efficiency given rising

energy prices.

FIGURE 9. Heat pump exports from China

Source: China Customs, WIND, Barclays Research

Payback periods exceed useful life

As highlighted in our sector report, we estimate that running costs based on current energy

prices suggest annual savings of just under €500 for customers switching from gas boilers to

heat pumps. However, we note that upfront costs – particularly related to installation – are

particularly discouraging and, before the application of any subsidies, imply a payback period

of 28 years on average vs. useful life of ~20 years. Even after applying subsidies, we note the

payback period remains close to the useful life and still too high for a consumer to switch.