Geberit Group sees strong recovery
The 5% growth in the third quarter reduces the fall in revenues in the first 9 months of 2020 to 5% (or -0.4% on a constant currency basis). Geberit expects a weaker fourth quarter, but with improved margins.
Geberit, the Swiss sanitaryware and bathroom fittings giant listed on the SIX Swiss Exchange, closed the third quarter of 2020 with strong growth, recovering most of the losses of the previous six months caused by the pandemic restrictions.
Net sales in the period July-September 2020 grew by 5.3% (a currency-adjusted increase of 8.5%) to CHF 794 million (more than 736 million euros). All other balance sheet indicators saw double-digit growth. EBITDA climbed to CHF 264 million (+14.1%), EBIT reached CHF 227 million compared to CHF 195 million in the third quarter of 2019 (+16.4%) and net profit totalled CHF 189.4 million (+11%) compared to CHF 170.6 million in the same period in 2019.
The Group’s net sales fell by 5% in the first nine months of the year to CHF 2,262 million compared to the previous year’s figure of CHF 2,381 million. However, after currency adjustments totalling CHF 110 million, the loss was just 0.4%. EBITDA fell by 0.9% to CHF 726 million (32% of turnover), while net income dropped by 6% to CHF 504 million.
In Europe, where Geberit concentrates the majority of its business, the third quarter brought a strong recovery in revenues in all countries with the exception of Benelux, including the markets that had been the hardest hit by the pandemic (Italy up 24% compared to the third quarter of 2019, France +14%, Spain +7%).
This rebound enabled Geberit to end the first nine months of the year with sales of CHF 2,079 million in Europe (-3.8% on the first nine months of 2019 but +0.7% on a constant-currency basis).
Nonetheless, a clear gap remains between the countries that have been less affected or have recovered more rapidly from the impact of the pandemic and those that are still suffering the consequences of the prolonged lockdown and the negative trend experienced in the first half of the year. The markets that saw double-digit contractions in the first 9 months of the year compared to 2019 included the UK/Ireland (-22.1%), the Iberian Peninsula (-12.9%), Italy (-11%) and France (-10.4%). This contrasted with sales growth in Germany (+5.8% to CHF 749 million), Austria (+4.8% to CHF 135 million), Eastern Europe (+3.7% to CHF 238 million), the Nordic countries (+3.3% to CHF 221 million) and Switzerland (+2.7% to CHF 230 million). All overseas sales contracted: the Middle East/Africa (-18.8%), Far East/Pacific (-14.5%) and America (-1.5%).
As for the group’s three business units, the Installation & Flushing Systems BU generated revenues of CHF 851 million in the first 9 months of the year (-0.1% at constant exchange rates), the Bathroom Systems BU posted a turnover of CHF 725 million (+0.6%), and the Piping Systems BU closed the year with CHF 687 million (-1.6%).
As for forecasts, the group’s management expects a weaker fourth quarter compared to Q3 and consequently a slightly less dynamic 2020 with respect to 2019, but with an improvement in EBITDA. This increase in margin is attributable to a number of factors, including pandemic related cost savings, the high levels of flexibility in production and logistics, lower raw materials costs and sales price increases. Thanks to these measures, it was also possible to compensate for the significant tariff-related increases in personnel expenses and additional investments in digitalisation initiatives.
Based in Rapperswil-Jona, Switzerland, Geberit Group operates globally and is Europe’s leading sanitaryware producer. Its production network consists of 29 facilities, 6 of which are located outside Europe. With around 12,000 employees in over 50 countries, it generated sales of CHF 3,083 million (around 2,834.6 million euros) in 2019.