Wed, Mar 13th 2024
Geberit faces a challenging financial landscape with a sales decline in 2023 and cautious projections for 2024 amidst a weakening construction industry.
Geberit generated less sales in the 2023 financial year than in the previous year and is also relatively cautious for 2024. This is because the sanitary technology manufacturer is once again expecting the construction industry to decline overall.
Specifically, sales fell to CHF 3.08 billion, which corresponds to an organic decline of 4.8% when adjusted for the negative currency effect. Sales in Germany, the most important market, fell the most.
Operating profit (EBITDA) rose slightly by 1.4% to CHF 921 million. The corresponding margin even improved by 3.1% points to 29.9%. Geberit pointed to flexibility in the plants and logistics, lower raw material and energy prices as well as price increases.
By contrast, net profit fell by 12.6% to CHF 617 million due to a one-off positive effect from the previous year, which was not repeated. Despite the fall in profit, the dividend is to be increased again slightly to 12.70 francs, for the thirteenth time in a row.
Geberit expects the market environment to remain difficult in the current year. The renovation business is likely to hold up better than the new construction business.
Whether the sales of 2023 can be maintained remains to be seen. “We have a low visibility of perhaps two weeks,” explained Group CEO Christian Buhl to the media on Thursday.
In any case, the start to the 2024 financial year has been rough. According to Buhl, sales in January and February were lower than in the same period last year.
Regardless of the market environment, Geberit plans to invest a further CHF 200 million in the expansion and modernisation of capacities. Projects are underway, for example, to expand production at the German sites in Lichtenstein and Pfullendorf and to specialise two ceramics plants in Finland and Sweden. Money is also being invested in the plants in Givisiez in Switzerland and in Pune, India.
Other priorities include increased marketing activities in markets such as India and the launch of a new shower toilet under the name “Alba” for the lower price segment. The celebrations to mark the company’s 150th anniversary will also incur extra costs.
According to Buhl, the Board of Directors will soon decide whether a new share buyback program is being considered. Albert Baehny will probably continue to chair the Board in the future. In the previous year, the age limit was raised to 75 in his favor. According to Buhl, all members of the Board of Directors are standing for re-election.
Geberit’s earnings figures, which were only just in line with expectations, were not well received on the stock market. The share was down more than 3% in the early afternoon.
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