“The Success of Heat Pumps in the Nordics Can Be Replicated Elsewhere”
Interview with Hans Backman, Group CFO
For more than 70 years, Sweden-based Nibe Industrier has been at the forefront of environmentally friendly heating technology, serving both residential and commercial markets with advanced heat pump solutions and a variety of industrial applications. Today, the company operates on a global scale, with a presence spanning Europe and the Americas. Group CFO Hans Backman spoke with European Business about current market dynamics, strategic priorities, and long-term opportunities.
European Business: Mr. Backman, for decades, Nibe has been a leader in intelligent heating systems, achieving global annual revenues of more than 4 billion EUR and employing more than 20,000 people. What defines your business today?
Hans Backman: At its core, Nibe is a heating technology company. Our brand stands for world-class solutions and sustainable energy across three distinct business areas. We are probably best known for Nibe Climate Solutions, our largest division, where we primarily develop and manufacture heat pumps. That business also includes ventilation systems, cooling equipment, water heaters, and other HVAC solutions, and accounts for approximately two-thirds of our global revenue.
European Business: Nibe Elements, by contrast, focuses on electrically heated elements for industrial applications.
Hans Backman: These components are used across a wide range of industries, including HVAC, semiconductors, wind energy, rail, automotive, and various white-label applications. As electrification accelerates across many sectors, we see significant growth potential for our products and expertise in this area. Our third business area, Nibe Stoves, focuses primarily on wood-burning stoves in Europe and North America. These are rather discretionary products – associated with comfort and lifestyle – but following Russia’s full-scale invasion of Ukraine in 2022, they also took on an energy security dimension, as consumers sought reliable backup heating solutions amid volatile energy markets.
European Business: The war in Ukraine has also accelerated Europe’s focus on the green transition. How has this environment affected Nibe’s operations?
Hans Backman: Prior to the pandemic, we experienced steady growth for many years, typically achieving approximately 10% organic growth and another 10% through acquisitions. During the pandemic – combined with ambitious EU climate targets – demand surged as people had the resources to invest in their homes and the spare time to conduct renovations. This trend intensified further after the invasion of Ukraine in 2022. However, the rapid upswing created considerable challenges. Suppliers struggled to keep up, and installers sometimes placed multiple orders to secure availability. After this exceptional period, we saw a sharp correction in 2024, which led us to implement a cost-saving program to stabilize operations. More recently, growth has returned to a more sustainable level.
European Business: How has Nibe managed to navigate these fluctuations successfully?
Hans Backman: Our decentralized business model is a key strength. The individual companies within our group operate with a high degree of autonomy, making their own decisions within the framework of our overall vision, policies, and code of conduct. This fosters strong local accountability and entrepreneurial thinking. At the same time, we provide financial support where needed and maintain close oversight to identify potential challenges early. This balance between local independence and centralized discipline has served us well.
European Business: The recent conflict in the Middle East has added further pressure to global markets. What impact do you expect on Nibe’s business?
Hans Backman: In the short term, geopolitical uncertainty tends to dampen demand. Consumers postpone renovations, and businesses delay investments, which inevitably affects our markets. Over the longer term, however, I remain very optimistic. All our products are centered on energy efficiency, and they have consistently proven their ability to reduce energy consumption. The broader shift toward electrification is unmistakable. The era of oil- and gas-powered homes and vehicles is gradually coming to an end, and Nibe is well positioned to benefit from that structural transition.
European Business: Heat pumps have been widely adopted in the Nordics for decades. What lessons can other regions draw from that experience?
Hans Backman: Heat pumps gained traction in the Nordics during the 1970s oil crisis, when the focus was primarily on energy efficiency rather than environmental concerns. Sustainability became a key driver much later. I don’t believe there is anything uniquely Nordic about this success story – it can be replicated elsewhere. There is indeed significant growth potential across Europe and North America. That said, the transition from fossil fuels to sustainable heating systems took more than 20 years in Northern Europe. It will likely take a similar timeframe in other regions. Policymakers can play an important role in accelerating this shift, for example by ensuring that the pricing of oil and gas more accurately reflects their environmental impact.