Geberit posts better-than-expected first quarter results

The Swiss group’s sales from January to March grew by 7.8% compared to the first quarter of 2021 to reach CHF 980 million. The Bathroom Systems division was up 5.5%.

Despite the very challenging environment, Geberit posted better-than-expected growth in consolidated turnover in the first quarter of 2022. Sales increased by 7.8% to CHF 980 million compared to the same period in 2021. Adjusted for currency effects, the increase was 13% (significantly higher than the 4.6% growth reported in the fourth quarter of 2021).

Operating cashflow (EBITDA) decreased by 3.7% to CHF 303 million but performed more strongly than expected (adjusted for currency effects it was +2.5%), as did net income (-5.3% to CHF 220 million). EBITDA margin remained at a high level (30.9% compared to the 34.6% of 2021).

The company partially offset the higher costs of energy (+94%) and raw materials (+24%) through sales price increases, which contributed to around half of sales growth in the first quarter of the year. The other half was attributable to positive volume effects driven by the continuing strong demand in the construction industry and pull-forward effects in view of further upcoming price increases.

In currency-adjusted terms, net sales in Europe grew by 13%, in the Far East/Pacific by 20.2%, in the Middle East/Africa by 14.9% and in America by 4.5%.

All three business units performed well: Installation & Flushing Systems grew by 14.4%, Bathroom Systems by 5.5% and Piping Systems by 19.3%. The group remains cautious about issuing forecasts for the coming months due to the significantly increased geopolitical risks and ongoing uncertainties regarding the Covid-19 pandemic. In addition to supply chain difficulties, the group is anticipating a 10% increase in raw material costs in the second quarter compared to the first quarter of 2022, largely due to the war in Ukraine. These rising costs will push up product sales prices.

On 25 March, the Swiss group announced the suspension of its operations in Russia, while in Ukraine, where Geberit employs 590 people, it partly resumed production in May at its factory near Kiev, which remained undamaged.