Geberit held back by weak construction sector and strong franc
Published: Wednesday, Jan 17th 2024, 07:30
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Geberit generated lower sales in the 2023 financial year than in the previous year. The sanitary technology group was held back by the weak construction industry in large parts of Europe, but also by the strong Swiss franc. However, there was a slight improvement in the final quarter.
Group sales for the year as a whole fell by 9.1% to CHF 3.08 billion, as Geberit announced on Wednesday. Excluding the negative currency effects, the organic decline was a more moderate 4.8%. Sales were therefore slightly above analysts' expectations.
According to Geberit, the financial year was characterized by an extraordinarily difficult environment with a declining construction industry in Europe. Volumes sold were significantly lower due to the strong prior-year period and the weak construction industry in Europe.
However, currency effects also depressed sales. The company puts the resulting negative effect at CHF 147 million. Price increases had a positive impact on sales of around 8 percent.
Upward trend in the fourth quarter
The situation for Geberit improved somewhat towards the end of the year. Sales in the fourth quarter, which is usually the weakest due to the Christmas vacations, increased by 4.1% to CHF 694 million. Adjusted for currency effects, the increase even amounted to 8.3 percent, to which price increases contributed 2 percent.
With regard to earnings, the statements made last November were formulated with even more confidence. Accordingly, the operating cash flow margin (EBITDA) should reach 30% in 2023 as a whole. The previous forecast was 29 to 30 percent.
Geberit is also already making statements about the current financial year. Accordingly, the construction industry is also expected to decline in 2024. The company aims to gain further market share in this environment.
Geberit will publish the profit figures and the complete annual report on March 13.
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