Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net sales increased by 2.5% in local currency despite a challenging European construction market.
- The introduction of new products, such as the Alba shower toilet, significantly contributed to sales growth.
- Free cash flow margin remained high at 19.9%, with substantial shareholder returns through dividends and buybacks.
- Geberit AG (GBERF, Financial) achieved a stable EBITDA margin of 29.6% despite wage inflation and increased operational expenditures.
- The company made significant strides in sustainability, reducing relative CO2 emissions by 63% since 2015.
Negative Points
- The European building construction market experienced a sharp decline, impacting overall market conditions.
- Currency fluctuations negatively affected net sales, with a CHF76 million loss due to weaker currencies.
- Higher tax rates due to OECD minimum taxation led to a 3.2% decrease in net income.
- Personnel expenses increased by 6.4% due to wage inflation and higher pension costs.
- Geopolitical risks and macroeconomic uncertainties pose challenges for future market stability.
Q & A Highlights
Q: Could you give us some insight about your thoughts concerning the wage, the tax discussions, and tariff discussions globally and how and where could be influenced or affected?
A: The tax rate has been fully implemented last year, and we expect it to remain around 19 to 20% going forward. Regarding tariffs, we do not expect any significant impact at this stage, as most of our operations are local, minimizing exposure to global tariff changes. β Unidentified_2
Q: Could you confirm the price increase in April as usual, and is it in the range of 1 to 1.5%?
A: Yes, the price increase is in the range of 1%, which is our usual rate before the recent inflationary period. We have started implementing this as of April. β Unidentified_1
Q: You mentioned that Alba is now the best-selling product in the shower toilet area. Did it cannibalize the others?
A: There was slight cannibalization in the mid-segment, but overall, Alba has stimulated the category and even helped the upper segment. The overall shower toilet portfolio grew double-digit in value last year. β Unidentified_1
Q: With Germany announcing a EUR500 billion infrastructure fund, how do you see that affecting construction and Geberit in your biggest market?
A: The fund could positively impact our business, especially in public buildings like hospitals and schools. More importantly, it could improve market sentiment and consumer confidence, which would benefit us. β Unidentified_1
Q: Could you comment on the growth from your initiatives in the Middle East and Asia? Were you above the 20% CAGR you targeted midterm?
A: Our initiatives in four countries outside Europe are expected to contribute around one-third of our growth expectations in these regions. β Unidentified_1
Q: What is the likelihood of further pricing hikes announced by 2025, and how would they be accepted by distributors?
A: Currently, we do not plan further price increases, but this could change depending on global developments. There is also potential for positive volume operating leverage to contribute to margins. β Unidentified_2
Q: Could you give us some more details on the increase in personnel costs, breaking it into wage inflation and higher pension costs?
A: Wage inflation was around 5% last year, and we expect it to be around 4% this year, ranging from 1% in Switzerland to 6-7% in Poland. β Unidentified_2
Q: Do you have an idea of how much of the growth in January and February was due to wholesaler stocking versus underlying growth?
A: The growth was geographically broad, and while we can't quantify exactly, it was clearly driven by the anticipation of price increases. β Unidentified_1
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
