Geberit reports increase in profitability despite decline in volumes

The Swiss multinational’s net sales decreased by 8.9% in Q1 2023 but EBITDA margin increased by 220 basis points to 33.1%.

The Geberit Group posted net sales of CHF 893 million in the first quarter of 2023, an 8.9% decrease on the previous year’s figure (adjusted for negative currency effects, the decrease came to 4.3%). These figures were positively impacted by price increases of around 12%. The decline in volume was primarily due to the record-high figures in the same quarter in the previous year and, to a lesser extent, the now completed reduction of excess inventories at wholesalers and a slowdown in the renovation business. In some European countries, there was also a shift in demand from sanitary to heating solutions due to the energy crisis.

In total, operating cashflow (EBITDA) fell by 2.5% to CHF 296 million. The EBITDA margin increased by 220 basis points to 33.1% compared to 30.9% in the same period in the previous year.

Regionally, currency-adjusted net sales in Europe fell by 6.0%, in the Far East/Pacific by 7.7% and in America by 1.3%. In contrast, the Middle East/Africa region saw growth of 37.4%.

All three product areas reported losses: Installation & Flushing Systems 5.8%, Bathroom Systems 4.6% and Piping Systems 2%.

Given the challenging environment facing the construction industry, the forecasts for the current year remain cautious. However, Geberit’s management is convinced that it can continue to achieve its medium-term targets of average annual net sales growth in local currencies of 4% to 6% and an average EBITDA margin of 28% to 30%.