Geberit (GEBN) H1 2024 earnings summary

Executive summary

• Net sales grew 1.7% in local currencies but declined 1.4% in CHF to CHF 1.64 billion due to negative currency effects, with slight volume growth achieved despite a declining European building construction market.

• EBITDA margin remained high at 31.6%, down 10 bps year-over-year, with stable profitability; net income in CHF decreased 5% due to a higher tax rate from new OECD minimum taxation in Switzerland.

• Free cash flow rose 17% to CHF 217 million, supported by improved working capital and lower CapEx.

• Earnings per share reached CHF 10.57, down 3.3% in CHF but up 0.9% in local currencies, aided by a share buyback program.

• Share buyback program (CHF 600 million) completed in H1 2024; new CHF 300 million buyback to launch in Q3 2024.

Financial highlights

• H1 2024 net sales: CHF 1,638 million, down 1.4% in CHF, up 1.7% in local currencies year-over-year.

• EBITDA: CHF 518 million, margin 31.6%, down 10 bps year-over-year; EBIT: CHF 444 million, margin 27.1%.

• Net income: CHF 350 million, margin 21.4%, down 5% in CHF; EPS CHF 10.57, down 3.3% in CHF, up 0.9% in local currencies.

• Free cash flow: CHF 217 million, up 17% year-over-year.

• CapEx fell 23% to CHF 62 million due to the phase-out of strategic plant expansions.

Outlook and guidance

• Full-year 2024 guidance: net sales in local currencies at previous year's level and EBITDA margin around 29%.

• Expects a challenging environment for the rest of 2024, with a continued decline in the building construction market, especially in new builds in Europe.

• Margin pressure anticipated in H2 due to less favorable base effect from falling direct material prices.

• Ongoing focus on gaining market share, strategic stability, and operational flexibility.

• Positive catalysts include higher sanitary standards and growth in India and Gulf region.