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Geberit deliveres strong financial results

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Business is going well for Geberit. The executive board with the CEO Christian Buhl presented this morning very good results for the first half of 2016. The figures provided exceeded analyst’s expectations in all categories. Net sales grew by 13,2% to 1'479,8 million CHF, and adjusted operating earnings rose to 390,4 million CHF, corresponding to an EBIT margin of 26,4%. The adjusted net result increased to 333,2 million CHF (a net operating margin of 22,5%). According to the executive board, the strong net sales growth is the result of a strong business performance, positive currency effects of 29 million CHF as well as two additional working days compared to the previous year. The strong operating margins result from synergies of the Sanitec’s integration, the volume growth and also lower raw material prices. However, the net result was impacted by the costs of the Sanitec integration in the amount of 17 million CHF.

Except for Great Britain/Ireland, the sales in Europe grew very well at an average of 7,5%. On the Iberian Peninsula the building crisis seems to be over as Geberit was able to increase its sales by 17,3% there. However, the figures from the Middle East/Africa, America and the Far East/Pacific region were below average, with partially significant profit declines.

The situation in the construction sector „demanding“

Despite all the positive outcomes, Geberit sees the situation in the construction sector for the rest of the year as demanding and characterized by uncertainty. Therefore, no growth or alternatively only a slight growth is expected among others in Switzerland, in North America and in the Gulf States. Fewer working days will also have an impact in the second half of the year. The companies guideline for 2016 suggests an organic growth of 5% and an EBITDA margin of 28%.

Share prices will continue to soar

The Geberit share has been rising sharply for a long time now. However, this did not put off the investors as yet. Even though the share buyback has been completed, the increased dividend and the very strong financial results will provide significant short-term tailwind for the shares. If the general market environment allows, there is nothing to stop a further record beating share price.

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