Geberit (GEBN) Q1 2025 earnings summary

Executive summary

• Net sales grew 5.3% year-over-year in local currencies to CHF 878 million, driven by strong volume, new product launches, and pre-price-increase wholesaler demand, with all product areas and regions contributing except Western Europe.

• Operating margins remained stable excluding CHF 14 million one-time costs for the Basel/German ceramics plant closure, which impacted reported EBITDA and EBIT margins.

• Earnings per share (EPS) was CHF 5.69, down 0.7% year-over-year; adjusted for one-offs, EPS would have been CHF 6.05, up 6%.

• Continued share buyback program, repurchasing 71,000 shares for CHF 37 million in Q1, which helped mitigate EPS decline.

Financial highlights

• EBITDA increased 0.7% to CHF 277 million; EBITDA margin at 31.5%, down 130 bps due to one-time costs.

• EBIT margin at 27.1%, down 150 bps, fully attributed to plant closure costs.

• Net income was CHF 187 million, down 1.6% year-over-year; net income margin at 21.3%.

• Free cash flow improved to CHF 23 million from -CHF 29 million, driven by better working capital and tax timing.

• Volume growth was approximately 6-7% year-over-year, with a slight negative price effect of about -0.5%.

Outlook and guidance

• Expect slight decline in new build activity in Europe for 2024, offset by positive renovation market; building construction demand in Europe anticipated to stabilize in 2025.

• Mixed outlook outside Europe: strong demand in India and Gulf region, decline in China’s residential sector.

• Direct material prices expected flat in Q2; further plant closure charges anticipated through 2026.

• Wage inflation guidance for 2024 is 3-4%.

• Strategic focus on expanding piping business, growing shower toilet segment, advancing growth outside Europe, and optimizing ceramics plants.