Geberit maintains operating profit margin in the first half-year
Published: Thursday, Aug 15th 2024, 07:40
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Geberit generated slightly lower sales in the first half of 2024, but maintained its profit margin thanks to low raw material prices. In view of the strong Swiss franc and the slump in the construction industry, the sanitary technology group now expects sales for the year as a whole to be on a par with the previous year.
Net sales fell by 1.4 percent to 1.64 billion Swiss francs in the first half of the year, as Geberit announced on Thursday. This includes negative currency effects amounting to 52 million Swiss francs. If these are excluded, the increase in local currencies is 1.7 percent.
Compared to the organic decline of 1.4% in the first quarter, momentum picked up again significantly in the second quarter (+5.2%). Volumes were slightly higher than in the weak prior-year period, as the decline in market demand was compensated for by the build-up of inventories, according to the business development report.
From a regional perspective, sales in the main region of Europe increased by 1.1% after adjusting for currency effects. The Far East/Pacific (+6.0%), Americas (+2.0%) and Middle East/Africa (+9.4%) regions also performed well.
Operating profit margin maintained
Operating profit before depreciation and amortization (EBITDA) was 1.6% lower than in the previous year at CHF 518 million, while the corresponding margin fell slightly by 0.1 percentage points to 31.6%. It thus remained well above the target corridor of 28 to 30 percent.
The company's net income fell by 5.0% to CHF 350 million. With the figures presented, Geberit slightly exceeded analysts' expectations for sales and roughly met them for the other figures.
Sales expected to be at previous year's level
As usual, Geberit provides its first concrete figures for the year as a whole at the halfway point: the construction supplier expects the construction industry to continue to decline, particularly in Northern Europe and Germany. In Switzerland, new construction activity is likely to develop more positively.
The company expects the renovation business, which accounts for around 60% of Geberit's sales, to be robust globally. The focus will also remain on strategic stability and operational flexibility.
In this environment, Geberit is forecasting sales at the previous year's level and an EBITDA margin of around 29%, as in the previous year.
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