Systemair's Strategic Position in the Global Ventilation Market and Its Sustainability-Driven Growth

In an era where climate action and ESG (Environmental, Social, and Governance) criteria are reshaping industries, companies that align their strategies with global sustainability goals are not only future-proofing their operations but also unlocking long-term value. Systemair, a leader in the ventilation sector, exemplifies this paradigm. By weaving ESG into its core business model, expanding strategically in high-growth markets, and optimizing operational efficiency, the company is positioning itself as a cornerstone of the carbon-conscious economy. For investors, this represents a compelling case for long-term value creation.

ESG Integration: A Foundation for Sustainable Growth

Systemair's ESG strategy is not a peripheral initiative but a central pillar of its business model. The company's four focus areas—Responsible Enterprise, Sustainable Workplace, Sustainable Operations, and Sustainable Products—demonstrate a holistic approach to sustainability.

• Responsible Enterprise: Systemair enforces strict ethical standards, including a zero-tolerance policy for corruption and a supplier code of conduct. This ensures that its supply chain adheres to environmental and social accountability, mitigating risks and enhancing stakeholder trust.
• Sustainable Workplace: With a target of 25% female leadership by 2025/26, the company has already achieved 24.7% representation in 2024/25. Its “zero injuries” vision has led to a 15% annual reduction in work-related injuries, fostering a culture of safety and inclusivity.
• Sustainable Operations: Systemair has reduced Scope 1 and 2 emissions intensity by 36% since 2019/20, surpassing its 2030/31 target of 50%. All production facilities are on track for ISO 14001 certification, and energy efficiency in manufacturing has improved by 5% annually.
• Sustainable Products: The company's ventilation systems are estimated to save 1.9 TWh of energy annually, equivalent to 500,000 tons of CO₂ emissions. This not only reduces clients' carbon footprints but also aligns with regulatory trends favoring energy-efficient infrastructure.

Systemair's ESG efforts are externally validated by an AA rating from MSCI and a Bronze medal from EcoVadis. Its science-based targets, approved by the Science Based Targets initiative (SBTi), further underscore its credibility in the sustainability space.

Market Expansion: Strategic Infrastructure and Emerging Markets

Systemair's 2025 market expansion strategy is a masterclass in aligning growth with sustainability. The company has invested heavily in new and upgraded production facilities in Germany, Canada, Norway, Italy, and India. These expansions are not just about scaling capacity but also about reducing the carbon footprint of logistics by localizing production. For instance, the 19,000 m² facility in India is tailored to meet the surging demand for energy-efficient ventilation in a rapidly urbanizing economy.

Emerging markets like India represent a dual opportunity: they offer high-growth potential while also demanding sustainable infrastructure. Systemair's localized production reduces transportation emissions and ensures compliance with regional environmental standards. This approach not only strengthens its competitive edge but also future-proofs its operations against supply chain disruptions.

Operational Efficiency: Financial Resilience and ESG Synergy

Systemair's financial performance in the 2024/25 fiscal year underscores the profitability of its ESG-driven strategies. Despite a -2.0% currency headwind, the company achieved organic growth of 2.0%, with net sales reaching SEK 12.3 billion. Adjusted operating profit of SEK 1.125 billion and a 9.1% margin highlight its operational efficiency.

The company's ESG initiatives directly contribute to cost savings and risk mitigation. For example, energy-efficient production processes and waste reduction programs lower operational costs, while its strong ESG ratings attract ESG-focused investors. Systemair's robust balance sheet—marked by a positive operating cash flow of SEK 1.08 billion and low debt—provides flexibility for strategic acquisitions and R&D investments. Recent acquisitions, such as Menerga's German agents, have enhanced service offerings and sales margins, further reinforcing its value proposition.

Investment Thesis: A Carbon-Conscious Economy's Champion

For investors, Systemair presents a unique opportunity at the intersection of ESG and industrial growth. The global ventilation market is projected to grow at a CAGR of 5.4% through 2033, driven by regulatory mandates for energy efficiency and the rise of green buildings. Systemair's leadership in sustainable ventilation solutions positions it to outperform in this evolving landscape.

Key investment highlights include:
- Strong ESG Alignment: With science-based targets and a track record of exceeding sustainability goals, Systemair is well-positioned to meet the demands of ESG-focused portfolios.
- Financial Resilience: A 7.9% average annual growth over the past decade, coupled with a 9.1% operating margin, demonstrates the company's ability to convert sustainability into profitability.
- Strategic Expansion: Localized production in high-growth markets ensures long-term scalability while reducing environmental impact.

Conclusion: A Win-Win for Investors and the Planet

Systemair's strategic integration of ESG, operational efficiency, and market expansion is a blueprint for sustainable growth in a carbon-conscious economy. By reducing emissions, enhancing workplace diversity, and investing in green infrastructure, the company is not only addressing global challenges but also creating shareholder value. For investors seeking long-term, ESG-aligned opportunities, Systemair offers a compelling case where environmental stewardship and financial returns converge.

As the world transitions to a low-carbon future, companies like Systemair will define the next era of industrial leadership. The question for investors is not whether to act, but how soon.