Ventilation growth and a net-cash balance sheet support business quality, but first-half cash conversion is weak. A peer-derived CHF 78.83 base fair value offers only modest upside to the last verified close.
Peer median 11.56× × (1 − 8% − 6% − 7% + 3%) = 9.4792×. The +3% quality adjustment uses return on capital, not net cash; cash enters only once after enterprise value. The peer ratios are trailing and have mixed observation dates, whereas Zehnder EBITDA is an FY2026 analyst forecast. €24M D&A is estimated, not company guidance. A 1× change in the target multiple moves A-share value by about CHF 8.21. ⚠️ Not investment advice.
| Component | Assumption | €/share |
|---|---|---|
| Core business value (EV) | €98.1M FY2026E adjusted EBITDA × 9.4792× risk-adjusted multiple × 0.9312 CHF/EUR / 11.125941M A-equivalent shares | +77.83 |
| Net liquidity | €11.9M reported June 2026 × 0.9312 / 11.125941M A-equivalent shares | +1.00 |
| Buyback / dilution | CHF 0.00 assigned; issued A and B counts unchanged year on year; no verified active buyback value | +0.00 |
| Option value / reserve | CHF 0.00 assigned; no separate speculative option value or extra cash credit | +0.00 |
| Base case fair value | CHF 77.83 + 1.00 + 0.00 + 0.00; unrounded model CHF 78.826 | CHF 78.83 |
The empty bar denotes unavailable data, not zero short interest. The A/B economic-equivalence bridge uses H1 2026 average treasury shares as an approximation; current treasury holdings may differ.
| EUR million | FY2023 | FY2024 | FY2025 | FY2026E |
|---|---|---|---|---|
| Sales | 762.1 | 705.8 | 760.7 | 780.0 |
| Adjusted EBITDA | 87.6 | 77.0 | 89.1 | 98.1 |
| Adjusted EBIT | 63.0 | 50.1 | 65.2 | 74.1 |
| Operating cash flow | 87.8 | 60.6 | 80.0 | N/D |
| Capital spending | 23.1 | 17.0 | 17.0 | N/D |
| Free cash flow | 64.7 | 43.6 | 63.0 | N/D |
| Net liquidity/(debt) | 70.8 | -11.8 | 32.8 | N/D |
Annual FCF equals reported operating cash flow less investments in property, plant, equipment and intangible assets. FY2026E sales are company-guidance midpoint; adjusted EBIT is a model extension of the reported H1 9.5% margin. FY2026E EBITDA includes €24M estimated D&A, near FY2025 €23.9M; cash flow is deliberately not forecast as if H1 working capital were normal.
| EUR million | H1 2025 | H1 2026 | YoY |
|---|---|---|---|
| Sales | 382.8 | 394.9 | +3.2% |
| Adjusted EBITDA | 44.9 | 49.8 | +10.9% |
| Adjusted EBIT | 32.7 | 37.7 | +15.3% |
| Net profit | 23.5 | 23.9 | +1.7% |
| Operating cash flow | 22.9 | 5.1 | -77.6% |
| Capital spending | 7.5 | 9.4 | +26.6% |
| Free cash flow | 15.4 | -4.3 | -€19.7M |
| Period-end cash | 44.8 | 43.5 | -2.9% |
Where the growth came from. Ventilation sold €272.1M in H1, up 7% reported and 8% organically; its share of group sales rose from 66% to 69%. EMEA ventilation grew 7% to €220.5M, while North America grew 12% in EUR to €42.1M, or 18% organically. The difference is a currency headwind, so the US expansion is stronger than the consolidated EUR line suggests. Asia-Pacific ventilation declined 13% to €9.5M amid weak Chinese housing demand. Adjusted ventilation EBIT rose 13% to €37.8M, a 13.9% margin; the radiator division was approximately break-even on an adjusted basis. The improving group mix, rather than a broad recovery in building products, explains most of the margin lift.
Why cash lagged earnings. The cash-flow statement records a €24.8M increase in trade receivables and a €3.7M inventory build in H1 2026. Management attributes these uses to ventilation sales growth and a strategic inventory buffer against supply disruption. Higher receivables can reverse when customers pay, but the report does not establish when they will do so. Operating cash flow of €5.1M was therefore far below €23.9M net profit, and €9.4M investment turned it into negative €4.3M free cash flow. The cash test for the second half is a reduction in receivables and inventory without a loss of delivery capacity.
Guidance versus the model. Management guides to €770M–€790M full-year sales and an adjusted EBIT margin near H1's 9.5%, with roughly €10M of reorganisation costs expected for 2026. The €780M sales midpoint and €74.1M adjusted EBIT in this DD are analyst extensions, not company forecasts. Medium-term goals are about 5% average annual sales growth and a 9%–11% adjusted EBIT margin. If radiator losses persist or ventilation growth slows, applying the midpoint margin to the entire year could overstate earnings; if H2 working capital stays tied up, the earnings multiple may also overstate cash returns.
The H1 2026 €5.1M operating inflow less €9.4M investment equals -€4.3M FCF, versus +€15.4M in H1 2025. A full-year recovery is possible because construction working capital is seasonal, but it must be demonstrated.
Business model — ventilation-led indoor climate
Ventilation €272.1M H1 2026 growing Residential heat-recovery systems, Clean Air Solutions, heat exchangers and EVO units for multi-family buildings. Growth reached 8% organically in H1. The company reports gains in the Netherlands, Spain and the Czech Republic; Germany grew despite soft new construction. North American ventilation advanced 18% organically after sales-network expansion and new projects, although EUR translation cut reported growth to 12%. Product adoption and installer training through new academies support the route to market, but sustained share gains remain to be proven. Radiators €122.7M H1 2026 pressured Radiators remain a meaningful 31% of sales, but H1 revenue fell 5% and adjusted EBIT was negative €0.1M. Lower-priced competing products and uneven renovation demand hurt pricing; France, the UK and Italy declined, whereas Germany, the Netherlands and Switzerland grew. North American radiator sales fell 17%. Cost reductions have begun to help volumes but have not restored segment profitability. Group and segment revenue totals differ by €0.1M due to rounding.
Investment thesis and what could change it. The value case rests on ventilation holding its growth and margin, while radiators stop absorbing group profit and H1 working capital unwinds. The separate divisional P&Ls should clarify whether these are durable economics or temporary mix benefits. Evidence against the thesis would be a repeat of weak cash conversion, further radiator price erosion or ventilation growth materially below the current 8% organic rate. The CHF 78.83 base fair value leaves limited room for such disappointments at CHF 73.30.
FY2025 group ROE proxy is 18.8%: €47.8M net profit divided by average 2024/2025 equity of €254.5M. At CHF 73.30, A-equivalent equity value is about CHF 815.5M (about €875.8M), implying roughly 9.0× FY2026E adjusted EBITDA after deducting €11.9M net liquidity. The share-class bridge matters: using only listed A shares would falsely inflate fair value per share.
Legal, regulatory and risk analysis
Governance check: company releases and annual governance disclosure were reviewed. No verified 2026 short-seller allegation, class-action filing, securities investigation, shelf offering or insider disposal above $500k was found in accessible sources; absence of a verified finding is not proof of absence.
SWOT analysis
- +Ventilation reached 69% of H1 sales and earns a much higher segment margin than radiators.
- +Adjusted group EBIT margin rose 100bp to 9.5% as mix and efficiency improved.
- +June net liquidity of €11.9M and 56.2% equity ratio provide balance-sheet flexibility.
- +FY2025 free cash flow of €63.0M shows cash generation is possible in a normal year.
- −H1 free cash flow was negative €4.3M as receivables and inventory tied up cash.
- −Radiators are still shrinking and produced a small adjusted operating loss.
- −€5.5M of H1 reorganisation costs make reported EBIT weaker than the adjusted figure.
- −Family-controlled B shares concentrate voting power despite lower dividend rights.
- →The EVO rollout targets multi-family buildings where ventilation attachment can rise.
- →New US states, projects and installer training could extend North American share gains.
- →Separate European P&Ls may reveal and improve the economics of each division.
- →Collection of receivables and inventory normalisation would restore cash conversion.
- !European construction and renovation may remain weak despite improving permits.
- !Energy and raw-material volatility could erode gains from operating efficiency.
- !CHF share pricing against EUR reporting adds FX sensitivity to the valuation bridge.
- !Persistent working-capital use could make the adjusted EBIT uplift low quality.
Summary by assessment area
- Ventilation's 8% organic H1 growth, 13.9% segment margin and rising sales share are the core operating strengths. The same figures show the limitation: radiators remained barely profitable and €5.5M of restructuring charges left reported group EBIT almost flat.
- June net liquidity and a 56.2% equity ratio reduce financing pressure, but H1 cash conversion requires an H2 reversal in receivables and inventory. Family control through unlisted B shares limits outside voting influence; reliable public short-interest data were not available.
- The CHF 78.83 peer-derived base fair value is 7.5% above the CHF 73.30 last verified close. That modest spread depends on the guided 2026 margin, temporary reorganisation costs and recovering cash conversion. CHF 55.24 bear and CHF 104.20 bull cases show how much the result can shift if those assumptions change.
Sources and data checks. Price/52W: Investing.com historical ZEHN quote and Börsenlotse cross-check (CHF 73.30 close 2026-10-13). Financials and guidance: issuer H1 2026 report , issuer FY2025 annual report , issuer FY2024 annual report . Capital structure: issuer share-class page ; economic shares calculation uses H1 2026 own shares as a proxy, subject to treasury-stock change. FX: ECB 2026-10-13 reference CHF 0.9312/EUR . Dated analyst target: Kepler Cheuvreux 2026-08-12 CHF 89 ; a same-day consensus snapshot was not reliably verifiable. Governance and material-event check: issuer news archive and FY2025 governance report; no verified >$500k insider disposal or current investigation located. Short interest: N/D — no reliable free Swiss short-position series found. Peer vendor multiples: LIAB StockAnalysis/S&P Global , SYSR StockAnalysis/S&P Global , FAN StockAnalysis/S&P Global ; observation dates differ and are stated in the table. Market data - last verified close 2026-10-13: ZEHN CHF 73.30, economic market cap ~CHF 815.5M (~USD 979.8M at ECB EUR/USD 1.1188), 52W range CHF 59.80-CHF 91.30, 9.268M listed A shares plus 9.900M unlisted B shares (11.126M A-equivalent economic shares after estimated treasury shares). Short interest: N/D (public SIX percentage unverified). Not investment advice. Prepared 2026-10-14. Additional operating commentary: issuer H1 2026 management detail .