Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Geberit AG (GBERF, Financial) achieved a mid-single-digit net sales growth of 5% in both Swiss franc and local currencies, reaching CHF878 million.
- The company maintained stable operating margins on all levels of the P&L, excluding one-time costs related to the closure of the Wesel ceramics plant.
- Strong volume growth was driven by new product developments and prebuying by wholesalers in anticipation of an April sales price increase.
- Geberit AG (GBERF) continued its share buyback program, purchasing 71,000 shares for CHF37 million in the first quarter.
- The company is investing in IT and digitalization, including AI initiatives and digital marketing, with an increase in operational expenditures by CHF20 million for these initiatives.
Negative Points
- The closure of the Wesel ceramics plant resulted in CHF14 million in one-time costs, impacting the EBITDA and EBIT margins.
- Energy prices increased by 36%, and wage inflation was at 3%, which offset the positive effects from operating leverage.
- Net sales in the Far East Pacific declined by 1%, driven by declines in China, despite strong growth in India.
- The company faced a slight negative price effect on net sales due to timing differences in customer bonuses and selective price adjustments in Switzerland.
- Geberit AG (GBERF) expects further charges related to the Wesel plant closure in 2025 and 2026, impacting future operating expenses.
Q & A Highlights
Q: Can you provide insights on how much Geberit is outperforming the market, particularly due to new products, and if the current trend is sustainable for the full year?
A: Christian Buhl, CEO, stated that it's too early to quantify market outperformance for Q1, but last year Geberit grew by 2.5% while the market declined. New products were a key factor in this outperformance. CFO Tobias Knechtle added that they are not providing full-year margin expectations at this time.
Q: Regarding April's sales, was the growth driven by volume or organic growth, and how are energy prices expected to trend for the rest of the year?
A: CEO Christian Buhl explained that April's sales included a mix of old and new prices, with volumes being the predominant driver. Energy prices are expected to have downward pressure short-term, but will likely remain above last year's Q2 levels.
Q: Can you elaborate on the customer bonuses and their impact on net pricing?
A: Christian Buhl noted that there were no special increases in customer bonuses beyond regular adjustments. The timing of bonus increases and sales price adjustments led to a slight negative price effect in Q1.
Q: How is the sentiment in Germany, and are there signs of improvement in the market?
A: CEO Christian Buhl confirmed an improved sentiment in Germany, with stable building permits and backlog for plumbers, indicating a potential stabilization in the market.
Q: What is the impact of the strong Swiss franc on Geberit's financials, and how does it affect margins?
A: CFO Tobias Knechtle stated that while the strong Swiss franc impacts top-line figures, Geberit has an almost perfect hedge, so margins remain unaffected.
Q: Can you provide more details on the one-off costs related to the Wesel plant closure?
A: CFO Tobias Knechtle explained that ongoing negotiations and retention costs will accrue over time, with product and machine transfer costs expected in 2026. The total expected one-off costs remain around EUR25 million for 2025 and 2026.
Q: How is Geberit performing in the Americas, and was there any prebuying due to tariff uncertainties?
A: CEO Christian Buhl indicated that there was no extraordinary tariff-induced prebuying in the US, as the price increase was a regular one.
Q: How does Geberit view the competitive environment, particularly with innovations from competitors like Lixil/Grohe?
A: CEO Christian Buhl expressed confidence in Geberit's innovation leadership, citing strong feedback from the ISH fair and a robust innovation pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
