This Research Note examines Viessmann climate and refrigeration solutions business based on their 2021 financial results, press releases, acquisitions, and divestments.

Founded in 1917, Viessmann is a leading global provider of sustainable climate (heating, cooling, water and air quality) and renewable energy solutions. The family-owned company is based in Allendorf, Germany with over 13,000 employees worldwide. The company is represented by 120 sales branches and 22 production facilities around the world.  

Despite adverse effects from the COVID pandemic and challenged global supply chains, the family business successfully grew in another year of crisis. The group’s total revenue in 2021 reached a new record high of EUR 3.4 billion (the previous year: EUR 2.8 billion). The significant growth rate of +21% was driven by increasing demand for premium heat pumps which jumped by +41%. More than 54% of revenues are derived outside Germany.

Together with their 2021 financial results, Viessmann group announced on 2^nd May 2022 that it would invest EUR 1 billion in the next three years to extend its manufacturing footprint, R&D labs and green solution offering portfolio, especially in heat pumps.

The group’s overall growth in 2021 was primarily driven by its largest business area Climate Solutions where the shift towards integrated climate solutions continued to pay off. A significant milestone in enabling the company’s large installation partner base was the launch of Viessmann’s ONE BASE, a new integrated platform which includes all climate solutions: From heat pumps with new natural refrigerants, district heating, solar thermal heating, home battery storage, biomass solutions, green gases and fuels, to ventilation solutions, and digital & value-added services, such as Viessmann Wärme/Heating-as-a-Service.  

Refrigeration Solutions business area also contributed positively to the Group’s strong development in 2021, especially by the smart combination of refrigeration, climate and building automation solutions as well as installation & after-sales services. The business area was able to use more synergies and expand its business, especially in food retail, indoor farming and health care applications. An important innovation is the amplification of intelligent cooling solutions based on a heat pump at the heart of the system, to both generate the needed refrigeration capacity as well as the needed climatization power for the building, thereby eliminating the need for additional, separate climate or heating units. 

Viessmann Investment, a newly established business area active since 2019, undertakes strategic investments in medium-sized companies, through minority or majority shareholdings. The Viessmann Investment portfolio currently comprises twelve shareholdings. With a total of around 3,000 employees, they generate a total turnover of approx. 480 million euros.

In April 2021, Viessmann completed a strategic investment in Priva, the second-tier Dutch manufacturer of building management systems. Viessmann has acquired a minority shareholding in Priva to emphasize the long-term perspective of the partnership. This allows Priva to pursue its strategy, which focuses on technical innovation and international growth while maintaining its independence. Viessmann, in turn, can use its stake to rapidly develop its business in climate solutions for commercial buildings and explore opportunities in the horticulture sector.

VC/O, established in 2017, is a digital business unit, which invests in startups and new business models to ensure the long-term prospects of the Group. All digital activities, which do not belong to the core business are currently organized under VC/O.

Alongside its organic growth, the Viessmann Group also successfully managed to grow through recent acquisitions, extending its family business-oriented partnerships in electric heating, district heating, after-sales services & building automation.

By becoming a shareholder in the heating, ventilation and air conditioning service company Value Added Engineering, Viessmann established its presence on the Australian continent. With the acquisition of Pacifica Home Services, an installation/service platform with a focus on heat pumps, Viessmann strengthened its presence in the United Kingdom. Additionally, the family company also extended its district heating activities in Poland, by acquiring a majority stake in Elektrotermex.

Viessmann’s growth rate for 2021 is worthy of note, particularly bearing in mind that for the previous four years, their growth rate was in the range of 5% to 6%.  These results together with their EUR 1 billion investment in heat pumps and green energy solutions place Viessmann in an extremely strong position in the European HVAC&R market.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.