Ariston Group: Trotz Absturz am deutschen Heizungsmarkt: Italienischer Konzern bereut Milliardenwette nicht

Paolo Merloni, the Italian entrepreneur behind the Ariston Group, expresses satisfaction with Germany's new heating law, which he believes will end the uncertainty that has plagued the industry in Europe. The Ariston Group is one of the world's largest manufacturers of climate technology, heating, and hot water systems. Germany's substantial market potential has become crucial for the company.

Just four years ago, the group concluded its largest deal in its history, paying a billion euros and acquiring shares in the Centrotec Climate Systems (CCS). CCS includes brands such as the heat pump manufacturer Wolf or the room ventilator producer Brink. Now, Germany accounts for nearly 20 percent of the group's largest market.

The German climate policy undoubtedly influences the success of the Italian company, with the heating law focusing on renewable energies and heat pumps being a prime example. Merloni criticized the policy in hindsight: "You can't turn an entire country into heat pumps within three years." The supply chain, production, and employee training of heating distributors lagged behind the unnatural surge in growth.

As a result, in 2023, the market in Germany sold 1.3 million heating units, the lowest number since 28 years, and the market fell by 47 percent in the following year. Merloni attributes this to the acquisition of CCS two years ago. However, recent figures indicate stabilization at a lower level. The Ariston Group earned roughly the same profit as before the CCS acquisition, with 2.8 billion euros in revenue and a profit of 132 million euros last year.

In 2024, the revenue shrank to 2.63 billion euros and the profit dropped to 2.5 million euros, a massive 98.7 percent decline. Merloni could now look back on his billion-euro investment in Germany with some criticism. Nonetheless, the company chairman is extremely satisfied, demonstrating his willingness to continue investing in the Mainburg location, home to the Wolf brand.

The company has invested 60 million euros over the past four years in the site, which consists of 4,500 square meters spread across three floors, dedicated to the "Wolf Campus." Here, research on the energy transition is conducted, and skilled workers are trained. Merloni is convinced that the German market will continue to grow strongly in the future.

"Existing heating systems are outdated and need to be replaced. Furthermore, energy efficiency requirements and the reduction of CO2 emissions have increased," he explains his assessment, which he must defend against critics. "Deep roots in Italy and Germany" Merloni is accused of emphasizing the potential on the German market before the CCS acquisition.

However, the group could not benefit from it. Additionally, unrealistic expectations were set when the shares were sold at 10.25 euros per share at the 2021 listing, and today they trade at around 3.50 euros. Despite this poor performance, analyst Alessandro Tortora of Mediobanca issues a positive outlook: "Ariston is a multipurpose player in the heating and thermal comfort sector, which can accompany market developments."

This applies particularly to Germany and Italy, the two largest markets for the group, thanks to strategic acquisitions. This fits the company's self-image of being a European enterprise with roots in both Italy and Germany. Founded in 1930 by Merloni's grandfather Aristide in the central Italian region as a scale manufacturer, the business later expanded into other sectors.

Francesco Merloni, the son, took over sanitary technology. In 1995, Paolo Merloni began his career within the company. Today, Europe remains the group's most important market, with 18 percent of revenue coming from Germany and 15 percent from Italy. Over 5,000 employees work for the company, while 12,000 work worldwide. The partnership with CCS was followed by a major deal in Italy in July, where the Ariston Group acquired the Italian Riello Group for around 320 million euros.

Analyst Tortora believes that the acquisition is "strategically very sensible" for the Italian market, as the brand is iconic there. Additionally, the market access has been strengthened because it depends on installers. Roughly half a year earlier, the Ariston Group entered into a joint venture with the US climate company Lennox.

The Italian company is today present in 40 countries with sales offices and customer service, and in 19 countries, it also has production units. Worldwide, the company invests roughly three billion euros after integrating Riello. Merloni looks forward to the future with confidence. He does, however, hope for predictable framework conditions from the government.

"We believe that the market should develop based on long-term guidelines, without abrupt changes," he says.