Earnings call transcript: Geberit Q1 2025 reports steady sales growth

Geberit AG reported a 5% increase in net sales for Q1 2025, reaching CHF 878 million. The company’s EBITDA rose by 1% to CHF 277 million, with an EBITDA margin of 31.5%. Earnings per share (EPS) stood at CHF 5.69, but excluding one-time costs, EPS would have been CHF 6.50, marking a 6% increase. Geberit also announced a share buyback of 71,000 shares for CHF 37 million. The stock currently trades near its 52-week high of CHF 725.79, with InvestingPro analysis indicating the stock is slightly overvalued at current levels. The company maintains an impressive gross profit margin of 72.85% and commands a market capitalization of $24.1 billion.

Key Takeaways

• Geberit achieved 5% growth in net sales, reaching CHF 878 million.
• EPS was CHF 5.69; adjusted EPS excluding one-time costs was CHF 6.50.
• Strong performance in product innovation, notably in piping and bathroom systems.
• Market conditions varied by region, with strong demand in India and the Gulf, but a decline in China’s residential sector.
• Share buyback of 71,000 shares for CHF 37 million.

Company Performance

Geberit demonstrated resilience in Q1 2025 with a 5% increase in net sales, driven by strong product innovation and strategic market initiatives. The company’s EBITDA increased by 1% despite a 130 basis point decline in the EBITDA margin. With trailing twelve-month EBITDA of $983.48 million and a robust return on equity of 46%, InvestingPro data reveals strong operational efficiency. Geberit continues to lead in product innovation, with notable growth in its FlowFit and MalPress TERM piping systems and the ALBA shower toilet line. For deeper insights into Geberit’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Revenue: CHF 878 million, up 5% year-over-year
• EBITDA: CHF 277 million, up 1%
• EBITDA Margin: 31.5%, down 130 basis points
• Earnings per share: CHF 5.69; adjusted EPS: CHF 6.50
• Share buyback: 71,000 shares for CHF 37 million

Outlook & Guidance

Geberit anticipates wage inflation of 3-4% for the full year, with energy prices expected to exert downward pressure. The company remains committed to new product development and expanding sales initiatives in emerging markets. Market stabilization in Europe is expected by 2025, with a positive renovation market offsetting declines in new build activity.

Executive Commentary

CEO Christian Buhl expressed confidence in the company’s performance and future prospects, stating, "We delivered strong results in the first quarter with a mid single digit net sales growth." He also highlighted the success of new product launches, saying, "We feel very confident with the new products we have launched recently."

Risks and Challenges

• Potential wage inflation of 3-4% could impact profitability.
• Declining new build activity in Europe may affect sales.
• Mixed international market conditions, with strong demand in some regions but declines in others, such as China’s residential sector.
• Increasing operational expenditures for sales initiatives and digitalization efforts.

Q&A

During the earnings call, analysts inquired about Geberit’s growth prospects and pricing strategies. The company confirmed mid-single-digit growth in April and discussed selective price adjustments in Switzerland. Geberit also noted minimal exposure to US tariffs and positive sentiment in the German market, with high growth in the shower toilet segment. InvestingPro data shows analysts maintain a moderate buy consensus, with price targets ranging from CHF 454.53 to CHF 788.74. The company offers a dividend yield of 2.18% and trades at a P/E ratio of 32.45x, reflecting investor confidence in its growth trajectory.

Full transcript - Geberit AG (GEBN) Q1 2025:

Christian Buhl, CEO, Geberit: Thank you for the introduction, and good morning, ladies and gentlemen. Welcome to our Q1 results conference call. Geberit had a successful start into the year with strong results. Let me start with the key statements for Q1. First, we achieved the mid single digit net sales growth despite one working day less.

And second, we kept operating margins stable on all levels of the P and L, excluding onetime costs for the closure of our ceramics plant in Basel announced in January. We booked in the first quarter CHF ’14 million onetime costs for this site closure, CHF 12,000,000 on OpEx and CHF 2,000,000 on depreciation level. Let me now comment on our net sales development in more detail. Net sales grew by 5% both in Swiss franc and local currencies to CHF $878,000,000. This growth was fully driven by volume and a slightly negative price effect on net sales price level.

The small negative price effect on net sales level was caused by two factors. First, the technical reason. We increased sales prices as of April as announced. However, we increased customer bonuses already as of January as this is regular market practice. This difference in timing led to a slight negative price effect on net sales level in Q1.

Secondly, we selectively adjusted prices for selected product categories in Switzerland this year due to the appreciation of the Swiss franc over the last years. The strong volume growth in Q1 was driven by a, the strong development of new products and b, pre buying by wholesalers in anticipation of the April sales price increase. We come now to the regional development. All growth figures refer to growth in local currency. In Europe, net sales increased by five percent.

Net sales increased in all sub regions except Western Europe, which was negatively affected by a market decline in France. In Middle East Africa, net sales increased by 15% driven by Turkey and South Africa. In America, net sales increased by 4%. Net sales in Far East Pacific declined by minus 1% driven by declines in China almost fully offset by strong growth in India. Let me now comment on the sales development per product area, which all showed a similar sales dynamic last quarter.

Installation and Flossing Systems grew by 6%, while Piping Systems and Bathroom Systems increased by 5%. I will now comment on the operating and financial results. I’ll start with the EBITDA development. EBITDA in Swiss francs and local currencies increased by 1% to CHF277 million. The EBITDA margin reached 31.5%, decreasing by 130 basis points, which can be fully attributed to already mentioned onetime operating expenses of 12,000,000 related to the site closure in Wiedl.

Excluding this onetime effect, the EBITDA margin in Swiss franc reached exactly previous year’s level. The positive effect from the operating leverage was offset by mainly two factors: First, a 3% wage inflation and second, thirty six percent higher energy prices. Direct material prices were basically on previous year’s level and did not have a material impact on the margins. EBIT margin reached 27.1%, a decrease of 150 basis points, also fully driven by the plant closure in Wessel, which amounted to CHF 14,000,000 on EBIT level. Excluding these onetime charges, the EBIT margin would have reached exactly previous year’s level.

Also, the net income margin would have reached exactly previous year’s level of 22.7 excluding the onetime closure costs. Earnings per share reached CHF 5.69. Excluding the effect of the closure related charges, EPS would have reached CHF 6.5, an increase of 6% in Swiss francs. We also continued our share buyback program in the first quarter. In the first three months, seventy one thousand shares were bought back for a total amount of CHF 37,000,000.

Let me now comment on our outlook, which does not differ from our market outlook given at our full year analyst conference in March. In Europe, we still expect a slight decline in newbuild activity with building permits in Europe down minus 2% in full year 2024. This decline is offset by a positive renovation market as indicated by several indicators, for example, increased real estate transactions. In sum, we continue to expect overall building construction demand in Europe to stabilize in the course of 2025. Outside Europe, we expect the big picture for the building construction industry.

We expect in several markets, for example, in India or the Gulf Region, a strong demand. Other markets, for example, China will be in a decline, mainly driven by the residential sector. On the direct materials side, we expect prices in Q2 to be on the level of Q1. In terms of operating expenses, we expect further charges related to the Wiesl plant closure related to the social plan, retention, transfer costs and depreciation in 2025 and also 2026. Let me finish our outlook with a trading update for April.

Net sales were like for like mid single digit above previous year’s level, supported by order deliveries from Q1. Please also keep in mind that Q2 this year has one working day less than Q2 last year. Let me now briefly comment on the Get Ready priorities this year. We will continue to have a strong focus on new products this year. For example, the new Duofix installation elements, but also important new products introduced over the last years like Clofix, MaPreStern and the new shower turret, Aldo.

Other important initiatives this year are dedicated sales activities outside Europe and in the area of IT and digitalization. We will continue to invest in our four dedicated sales initiatives in emerging markets, namely in India, Egypt, Saudi Arabia and Vietnam, by strengthening the respective local sales organizations with additional headcounts and targeted marketing efforts. Secondly, we will further invest into IT and digitization, specifically into AI initiatives and digital marketing efforts. In total, we are increasing our operational expenditures by CHF 20,000,000 this year for these initiatives. These expenses are ramping up in the course of the year.

Let me close our introduction with a short summary and our key messages. Geberit delivered strong results in the first quarter with a mid single digit net sales growth driven by a strong development of new products and pre buying of wholesalers in anticipation of the April price increase. Operating margins were constant on all levels of the P and L, excluding the onetime costs related to the Wessel plant closure. This means that earnings per share, excluding these onetime charges, grew in line with top line. For 2025, we continue to expect stabilizing market demand in Europe and a mixed environment overseas.

Airbridge is well prepared to continue its outperformance in this environment as already demonstrated several times in the past and also last year. Our confidence is based on the fundamental need for our products, our resilient strategy and business model and our long term focus and track record. Thank you for your attention. We are now ready to answer your questions.

Conference Moderator: We will now begin the question and answer session. Session. Our first question comes from Elodie Rall from JPMorgan. Please go ahead.

Elodie Rall, Analyst, JPMorgan: Hi, good morning. Thanks for taking my questions. So first of all, I was wondering if you could give us a bit of color about how much you think you are outperforming your underlying markets, in particular, thanks to the push through of your new products. And if you think that the trend that you have reported so far, including April, is what you think you can deliver for the full year? And second, you said margin was flat excluding the one offs.

Is that also something that you think is sustainable for the full year? Thanks very much.

Christian Buhl, CEO, Geberit: Thank you for your question. With regards to the market outperformance, one quarter is always too short to assess or to get evidence how much we have outperformed the market. But I would refer to last year where we have been growing with 2.5%, while the market was clearly down, especially in Europe, mid single digit. And I think one of the main reasons last year were new products, why we were able to outperform, and I would assume without having number evidence for the first quarter, this was also true this year in the first three months. Second question Tobias, please start.

Tobias Knechtle, CFO, Geberit: As to the margin, like always at that moment in the year, we’re not giving yet an indication of the full year margin expectations.

Conference Moderator: The next question comes from Ilaria Boricelli from Goldman Sachs. Please go ahead.

Daniela, Analyst, Goldman Sachs: Hi, good morning. It’s actually Daniela here. Thanks for taking the questions. I have three quick questions. First, I wanted to clarify on April on your comments.

Was that a volume or an organic growth comment, meaning is the price increase over and above the mid single digits? I’ll ask them one at a time, so I’ll ask the others after.

Christian Buhl, CEO, Geberit: April includes now the price increase, but keep in mind, part of the April sales were driven by deliveries from Q1 with still old prices. So it’s quite a mixture of old prices and new prices in April, but the predominant part obviously was volumes.

Daniela, Analyst, Goldman Sachs: Okay. Got it. And then you’ve mentioned sort of in 1Q that energy prices were increasing. I know you commented raw materials, you gave a guidance for 2Q, but what are you seeing on energy prices for the rest of the year?

Christian Buhl, CEO, Geberit: For the rest of the year, it’s very difficult to say. Just short term, we expect that there are certain downward pressure on energy prices. Already in March, they were a little bit lower than in February. We also expect April to be a bit lower. But keep in mind that we have still a low base from last year.

So compared to Q2 last year, energy prices most probably will be still above last year Q2.

Daniela, Analyst, Goldman Sachs: Thank you. And then just a question in terms of the level of customer bonuses. Can you comment on how this has trended over recent quarters? Has it increased, is the same sort of give us a bit of an idea given this was one of the reasons of the net price in the bridge this quarter?

Christian Buhl, CEO, Geberit: So we didn’t do any special new customer bonus increases, which we didn’t do we do which we didn’t do in the past, sorry, which we didn’t do in the past. So a normal behavior that at the beginning of the year, you increase the bonus and then you increase list prices per April and the net effect is then that’s what we already talked about, the net sales price increase. However, we did not obviously increase sales prices last year. We did also not increase bonuses last year. So this is the reason why this year, we have an effect of this normally increased bonuses as of January, which led to a slight negative price effect on net sales level in Q1.

Daniela, Analyst, Goldman Sachs: Got it. Thank you very much.

Conference Moderator: The next question comes from Martin Husler from ZKB. Please go

Christian Buhl, CEO, Geberit: ahead. Yes.

Martin Husler, Analyst, ZKB: Good morning. Thank you. I have three questions actually. First of all, would you say that the good dynamic that you saw in Piping Systems, which was more or less in line with overall sales, can be seen as an improving situation in new construction? Maybe I ask this one by one.

Christian Buhl, CEO, Geberit: Difficult question or difficult to answer. I think for us, the main driver in piping at the moment is not maybe a slight change of the underlying market. It’s still the main driver is our new products because we have seen strong sales in the first quarter, again, for FlowFit and also Malpress TERM, a new metal supply pricing system introduced last year. I think this is the more important driver for our sales development than a gradual improvement of the newbuild market, which is underlying.

Martin Husler, Analyst, ZKB: Okay. Thank you. Then the second question is referring to your raw material cost guidance for the second quarter. However, it looks like if I have a look at the red line, it’s clearly or the trend is going down. Am I missing here something or why should it did it change in April, for example?

Or yes, what’s the reason of that?

Tobias Knechtle, CFO, Geberit: Well, we simply expect flat for the next quarter, and that’s not much more to add to that, yes. Also, one thing to take into consideration on that page is the scale. We it starts at 120. So these are really very small changes year on year. We on purpose did that to exemplify the changes, but take the scale into consideration when analyzing the picture.

Martin Husler, Analyst, ZKB: Okay. Thank you. And then maybe a more important question on the sentiment in Germany. Obviously, I think we saw a certain bottoming out and I think at the ISH, at least the companies that I met or the different, let’s say, installers and so forth, they were a bit more optimistic in March for that trend of the year. Has this continued according to your view that, let’s say, not maybe in numbers, building permits are still very weak, but sentiment wise, there is a certain improvement in the market going on.

What’s your view on that?

Christian Buhl, CEO, Geberit: We agree on that view. The sentiment has improved. In Germany, I would also say on the number side, you see one or two positive signs. Building permits in January and February this year for the first time did not decline anymore on the residential side, so they’re very stable. Also, if we look at the latest number, which we have from the backlog for plumbers, which has been stable, it’s at five hundred 15.4 at the moment, which is a stable level compared to Q1 last year.

So it’s the first time that we didn’t see a decline for two point five years also on the backlog side. So I would say this positive sentiment, which you were talking about is even underpinned with one or two numbers and facts.

Martin Husler, Analyst, ZKB: Okay. Thank you.

Conference Moderator: The next question comes from Yassine Touhari from On Field Investment Research. Please go ahead.

Christian Buhl, CEO, Geberit: Yes. Good morning very much.

Yassine Touhari, Analyst, On Field Investment Research: Thank you very much for taking my question. You’re talking about the mid single digit organic growth in April. But I understand it includes some sales from the first quarter when clients bought in advance of the price increase. So my question is like when you’re looking at your order book, do you see a slowdown in May and June as the wholesale as you don’t have the pre buying effect? And also when you’re talking about the negative working day impact in May or June?

Christian Buhl, CEO, Geberit: Unfortunately, our order book is very short term. We don’t have an order book for June. Our order book is only around two weeks. That’s a challenge. Therefore, I can’t answer your question.

We don’t have so much looking ahead into the market. And

Yassine Touhari, Analyst, On Field Investment Research: the working day impact, is it in May or June?

Christian Buhl, CEO, Geberit: I’m sorry, the working EBIT so that the mid single digit growth is like for like, this means it’s adjusted for currencies and it’s adjusted for working days. Technically, we had a working day left in April, but the like for like growth means currency adjusted and for working day adjusted, and this was a mid single digit growth in April.

Yassine Touhari, Analyst, On Field Investment Research: And the last question would be on the foreign exchange. I think the Swiss franc has been very strong. What kind of FX impact do you see for the second quarter? Is it mid single digit decline in currency? Is it something that seems reasonable to you?

Tobias Knechtle, CFO, Geberit: We’re not making currency forecast. I mean, it’s probably the most difficult question you can ask anybody. Also, yes,

Christian Buhl, CEO, Geberit: go ahead.

Yassine Touhari, Analyst, On Field Investment Research: When you’re looking at the current level of currency, I’m not asking you to do forecast.

Tobias Knechtle, CFO, Geberit: Well, clearly, that has a big impact on the top line and on the absolute figures. However, in terms of margin, like always, we have an almost perfect hedge, so it should not affect margins.

Yassine Touhari, Analyst, On Field Investment Research: Thank you very much.

Conference Moderator: The next question comes from Martin Flueckiger from Kepler Cheuvreux. Please go ahead.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Thanks. Good morning, gentlemen. Three questions, if I may. Firstly, on bathroom systems, 5%. That’s quite an unusually high number.

Is that driven by the pre purchases? Or how do you explain that solid performance? That’s my first question. I’ll take one at a time.

Christian Buhl, CEO, Geberit: Two drivers. One is pre buying for the other two products as well ahead of the price increase of April. And secondly, a very strong development of our shower curtain at Alba.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Okay. Makes a lot of sense. Thanks. And then on your EBITDA bridge EBITDA margin bridge, I was surprised to see that the so called other cost effect was only 100 bps. That seems unusually low.

Is there particular reason for that?

Tobias Knechtle, CFO, Geberit: No. We’ve cited the two main reasons that are included in there, which are the energy prices and the wage inflation. A minor effect also then comes from the €20,000,000 additional cost that Christian mentioned in the call and already mentioned that the full year results. But these are only ramping up, so there was a minor effect. So no, I think it’s the absence of anything else that makes it such a low figure.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Okay. Third one, talking about one off costs, can you provide a little bit more granularity on how you expect these to pan out over the coming quarters and into 2026, please?

Tobias Knechtle, CFO, Geberit: So in terms of yearly development, that’s still a bit difficult to tell right now, but I can give you some hints. So there’s on the EBITDA impacting costs are above the line. There’s still the ongoing negotiation with the social partners, their retention costs, and these are clearly accruing over time on a linear basis. This product and machine transfer costs, these will rather incur in 2026. And then other factory and site closing costs, which are then as well rather towards the end of the period, so 2026.

Overall, 25,000,000 and $2,026,000,000 we still expect around the €25,000,000 laid out. So roughly said, all which is social costs and first part of machine and transfer costs this year, the rest then mostly product and machine transfer costs then next year.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Okay. And in terms of numbers, because we need to run spreadsheets, I’m afraid. Can you give some guidance on what that means in terms of total one off costs, five percent and twenty six

Tobias Knechtle, CFO, Geberit: Yes. No, the split between this year and next year, I think we can provide in with the half year results.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Okay. Thanks.

Conference Moderator: The next question comes from Patrick Rafaisz from UBS. Please go ahead.

Patrick Rafaisz, Analyst, UBS: Yes. Thanks. Good morning, everybody. I also have three questions. The first would be a follow-up on the net pricing effects in Q1.

You already talked about the customer bonuses, but can you also add a bit more color on the Swiss price adjustments, especially which product categories were impacted?

Christian Buhl, CEO, Geberit: They were very selective. I don’t want to go into too much detail, also due to competitive reasons, but they were mainly related to products obviously, which are manufactured outside Switzerland. And one example is an important product category, which is fully manufactured in the Euro area in Germany. And that was the main reason why we selectively adjusted prices because we have been taking into account the appreciation of the Swiss francs over the last years to avoid cross border business. So it was very selectively, but I don’t want to go into too many details which kind of categories we decreased prices.

Patrick Rafaisz, Analyst, UBS: And would you say these two effects, customer bonuses and Swiss price adjustments were more or less equal contributors to the net pricing effect?

Christian Buhl, CEO, Geberit: To be honest, I don’t even know. I don’t know. I

Patrick Rafaisz, Analyst, UBS: Then the second question would be on the America performance, because you talked about the pre buying ahead of price increases in Europe. Was there any maybe pre buying ahead of tariff uncertainty in Americas that helped?

Christian Buhl, CEO, Geberit: To the extent that we are aware of, I would say no, because we did a regular price increase in The U. S, a usual one, which was not the tariff based so far. That might change in the course of the year. But the price increase so far was a normal one, so there was no extraordinary tariff induced pre buying so far in The U. S.

Patrick Rafaisz, Analyst, UBS: Okay, great. And then the last question would be a follow-up on the one offs. I think what you described in Martin’s questions earlier was mostly on the OpEx side. I think the original indication was also for the €15,000,000 of write downs, which could occur in H1 potentially. In Q1, we only had about €3,000,000 So is that the larger number than in Q2?

Or is that also hard to say at this point?

Tobias Knechtle, CFO, Geberit: We don’t expect in Q2, we don’t expect a significant figure on the depreciation. That figure actually in impairment could be lower than the announced EUR 15,000,000 for potentially two reasons. One is if we’re transferring more machines to other plants and that is an investigation which is ongoing, but will take the rest of the year. And as long as that is not clear, the impairment also is not done. And the other one is if the expected land sale can be netted with the impairment need, which is possible that would also then reduce that EUR 50,000,000 as that was a gross figure originally.

This is well more detailed than with the H1 figures.

Patrick Rafaisz, Analyst, UBS: Okay. That’s very helpful. Thank you very much.

Conference Moderator: The next question comes from Arnaud Lehmann from Bank of America. Please go ahead.

Arnaud Lehmann, Analyst, Bank of America: Thank you very much. Good morning, gentlemen. A couple of questions, please, remaining on competitive environment. I mean, obviously, you’re doing very well with innovation and you mentioned your outperformance. We are also seeing some of your competitors being quite proactive with innovation.

I’m thinking particular of LixilGoy, who’s been launching a few new products. So can you please qualitatively comment on the competition? Do you think you’re gaining share? Do you think that their innovations are weaker than yours? Anything you can say to help us understand?

And the second question, which is slightly related, Groi has been talking more and more about the repeat business they can get from cartridges. So systems like, for example, water purification that needs to be renewed regularly. Is it something that you already have in your product range? Or is it something that you’re thinking of expanding going forward? Thank you very much.

Christian Buhl, CEO, Geberit: So I think it’s logical by nature that also competition innovates, and this is good for the market, this is good for the industry. We are innovating. If I take the ISH, this was the fair or this is the most important fair for sanitary products took place in March, a global fair. And if I would try to summarize feedback from customers, I think we don’t have to hide ourselves if it comes to the question, who is the most innovative company. I don’t want to go into detail comparisons with other competitors, but we feel very confident with the new products we have launched recently, the last one, two years, and also the ones we have launched this year.

And we also feel confident with our innovation pipeline if we look at our competitors if we have looked at our competitors at this fair in Frankfurt. So I think we are well prepared and we can claim it’s a bit difficult word, but I think we can claim that we are clearly innovation leader. Number two, we have a kind of a repeatable business. We don’t have in our portfolio products or elements of products, which you need to replace after a certain point. So there is no replacement business.

When we sell a product, it’s installed hopefully for decades and then maybe in a renovation case, then you renovate and then you replace the product. But we have no products which are based on the business model of selling replacements or rechargeables. There’s a small, small exception if it comes to shower toilets, but where we have some consumables, which we are selling, but this is a very, very low share and this is not part of our business model.

Arnaud Lehmann, Analyst, Bank of America: Very clear. Thank you very much.

Conference Moderator: The next question comes from Christian Arnold from ODDO BHF. Please go ahead.

Conference Moderator0: Yes. Good morning, gentlemen. On the extraordinary costs, I mean, in March, you were guiding for a total amount of DKK 14,000,000, thereof DKK 15,000,000 write off. That has not changed as a total figure, right?

Tobias Knechtle, CFO, Geberit: That is correct. That has not changed. What I hinted at before is that the depreciation part, so the EUR 15,000,000 could come lower than that for two reasons. One is more machine transfer potentially. And the second one is if we are able from an accounting point of view to net the expected gain from the land sale with the other depreciation.

That as well, we should have more clarity in the course of the year.

Conference Moderator0: Okay. And comparing that with the €14,000,000 you booked in Q1, I mean, then it looks like that this €14,000,000 is actually quite a big number, I mean, thinking about the two years process. So for the quarters to come, we can clearly calculate this lower negative impact.

Tobias Knechtle, CFO, Geberit: Yes, obviously. So that’s not a it’s not ramping up. The only thing that ramps up gradually are the retention costs, which we accrue with every month. The bulk of what has been booked, so the EUR 12,000,000 the bulk of these EUR 12,000,000 are the first part of the social plan, and that one is booked as a one off, and you need to book that at the moment that it’s decided and announced, which we fulfill. So according to IFRS, we have to fully book our expectation at that stage on that moment, and that was therefore reflected in Q1.

Conference Moderator0: Okay. Then on the shower toilets, I mean, you were mentioning the very strong development of ALBA. So that means that you are clearly growing double digit again in that product line, right?

Christian Buhl, CEO, Geberit: We are growing double digit on sales level, and we are growing significantly double digit on volume level in shower toilets driven by Alvheim.

Conference Moderator0: Okay. And this double digit, there’s no one as a first digit, I assume.

Christian Buhl, CEO, Geberit: Sorry, say again, I didn’t want. Double digit means there are two figures.

Conference Moderator0: Exactly. So there’s no one as a first digit number, right?

Christian Buhl, CEO, Geberit: You mean that the volume growth, I can tell you, not a one, no? It’s not a one. The first digit, yes, correct. It’s significant double digits, high double digits. But maybe if I may add, Mr.

Arnold, if I may add a comment. What is also important, if you look at the ALBA volumes now quarter by quarter and starting with the third quarter last year, that was the first normal quarter after the introduction. We see also a very nice growth now only for ALBA over these three quarters. So also dynamic of ALBA is increasing.

Conference Moderator0: Okay. And in terms of countries maybe? I mean is it a German, Swiss theme, this Alba? Or you have a broader footprint here?

Christian Buhl, CEO, Geberit: No, I would say that’s really across Europe. Obviously, the numbers are higher in the German speaking countries. But if you look at growth compared to what we have already what we already have in terms of shower toilet sales in these countries, it’s a very broad growth across Europe.

Conference Moderator0: Okay. And maybe the last question, I’m thinking about what you mentioned about the selectively reduced prices in Switzerland and the customer bonus increase, which also had a negative impact on pricing in Q1. So that means your volume growth in Q1 was actually at 6%, seven %, right?

Christian Buhl, CEO, Geberit: Correct. And please also keep in mind, we had one working day less. So if you had the missing working day, you are at that number 7% around, I would

Conference Moderator0: say, volume growth. Okay. You.

Conference Moderator: The next question comes from Raimo Rosenow from Helvetia Bank. Please go ahead.

Conference Moderator0: Yes. Thank you. Just one question left here. Coming back on the selective price decreases in Switzerland, does this also mean that you did not implement any price increases as of April in Switzerland? Or did you still do that in other product categories?

Christian Buhl, CEO, Geberit: That’s a very good question. We did some sales price increases in some other categories. In some, we kept the price stable and in some selected, we decreased. So it was a mixed picture of price changes in Switzerland, depending mainly on the origin of manufacture.

Conference Moderator0: Okay, great. That’s all from my side. Thank you.

Christian Buhl, CEO, Geberit: You’re welcome.

Conference Moderator: The next question comes from Charlie Ferenbach from AWP. Please go ahead.

Conference Moderator1: Good morning, gentlemen. I’m not sure if I missed your wage inflation guidance you usually do for the full year. Thank you.

Tobias Knechtle, CFO, Geberit: We remain at 3% to 4%.

Conference Moderator1: Thanks a lot.

Christian Buhl, CEO, Geberit: Welcome.

Conference Moderator: The next question comes from Ghosh Pajuwani from Bernstein. Please go ahead.

Conference Moderator2: Hi. Thanks for taking my questions. So I have a couple. So in terms of the wage inflation, you mentioned you were at 3% for for q one, and you are confirming three to 4% for the full year. And my second question is on US tariffs.

I think you alluded to it previously. How much of your US sales do you actually import? So what would be the direct impact of any tariffs, any potential tariffs on your sales? And actually, a third one, if I may, in terms of your costs. So please, could you remind us of your hedging policies on energy and your raw materials?

Thank you.

Christian Buhl, CEO, Geberit: I’ll start with question number two. Tobias will answer question number one and number three. We have, as you know, a share of sales of around 3% in U. S. And out of this around CHF 100,000,000 sales, the vast majority is locally manufactured.

We have two plants in The U. So it’s a very small part, basically the consist in our core product, which we import from Europe. So it’s a very low share of import products in The U. S. And question number one, please.

Tobias Knechtle, CFO, Geberit: On wage inflation, as you correctly noted, around 3% in Q1 and higher 3% to 4% for the full year. The reason is that the wage inflation in Germany this year has only been implemented as of April 1, whereas last year was implemented January 1. Therefore, slight difference between Q1 and the full year. When it comes to hedging policy on energy, in general, we’re not hedging to a very large extent. We’re buying spot.

Conference Moderator2: And raw materials?

Tobias Knechtle, CFO, Geberit: Raw material, same thing. There we sometimes simply do some pre buying. So we fill our stock for a certain duration. But for your consideration, I would consider that stock as spot buying.

Conference Moderator2: Okay. Thank you.

Tobias Knechtle, CFO, Geberit: Welcome.

Conference Moderator: The next question comes from Axel Stasse from Morgan Stanley. Please go ahead.

Conference Moderator3: Yes, good morning, everyone. Thanks for taking my question. I have one remaining. Just on the order intake in April. Based on the previous comments, is it fair to assume the order intake was low single digit up versus last year in April?

Christian Buhl, CEO, Geberit: Sorry, Ken. It was difficult to understand. Can you repeat your question? Sorry. Yes.

Sorry. Can you hear me? Yes. But it was try again, yes.

Conference Moderator3: Sure. Yes, sure, sure. So I was just asking about the order intake in April. Based on the previous comment that you provided, is it fair to assume that the order intake was up low single digit versus last year in April?

Christian Buhl, CEO, Geberit: We only commented on sales net sales in April. We didn’t do any comment on order intake, and we will also not comment now on order intake in April because we just don’t know.

Conference Moderator: We have a follow-up question from Martin Husler from ZKB. Please go ahead.

Martin Husler, Analyst, ZKB: Yes, thank you. I have two follow ups actually. So you mentioned Turkey and South Africa as drivers, let’s say, outside Europe. However, you have dedicated growth strategies in Vietnam, Saudi Arabia and Egypt among others. So does this mean that those three countries or regions didn’t grow as you would have expected?

Christian Buhl, CEO, Geberit: Not at all. It’s just in these regions, quarterly numbers are very much driven by projects. And sometimes you have, in the case of South Africa, just a good quarter because of projects, the same was, by the way, too, in Turkey. So that has nothing to do with these initiatives. Overall, also, by the way, India, for example, one of these initiatives had a very strong quarter.

So don’t read too much into that in quarterly numbers in these emerging markets, too volatile.

Martin Husler, Analyst, ZKB: Okay. Thank you. And then two housekeeping. Am I right to assume that most of the cost incurred as one off above EBITDA was personnel cost? Or were there any other cost P and L items hit?

Tobias Knechtle, CFO, Geberit: No, it’s fully personnel costs in Q1.

Martin Husler, Analyst, ZKB: Thank you. And maybe last one you won’t answer, but what were the direct costs for your presentation at the ISH? Is this like a single to mid digit million number?

Christian Buhl, CEO, Geberit: So the honest answer is expensive. But it was don’t know, seven digit for sure, but we don’t go too much into the details here.

Martin Husler, Analyst, ZKB: Okay. Thank you.

Christian Buhl, CEO, Geberit: Welcome.

Conference Moderator: Also, the next question is a follow-up from Elodie Rall from JPMorgan. Please go ahead.

Elodie Rall, Analyst, JPMorgan: Yes. Hi. Thanks for taking my follow-up. So just coming back on the sales development. One first my question on my first follow-up question is on Q2 comps.

Clearly, last year, you had said at the time of the year that April was slightly up like for like, but you delivered a 5% organic growth for Q2. So first of all, do you see tougher comps in May and June?

Christian Buhl, CEO, Geberit: So Q2 last year is a bit stronger comps compared to Q1 last year. I agree on that. And one of the reasons is that in Q2, we saw some restocking of wholesalers last year.

Elodie Rall, Analyst, JPMorgan: Okay. Then the follow-up is, obviously, we’re all trying to figure out how much of the mid single digit sales growth you’ve seen in Q1 and April is due to pull forward demand? And how is that developing given the comps getting harder in May and June?

Christian Buhl, CEO, Geberit: We will be very happy if we will know the answer to these questions, but we don’t know. So that’s always the issue that the wholesalers don’t tell us how much of their orders were now driven by technical buildup of stocks or buildup of stocks because of low prices in advanced price increases. So we only have qualitative feedback. It’s truly or surely a driver, but we can’t quantify it because we don’t know it.

Elodie Rall, Analyst, JPMorgan: Okay. Okay. Thanks very much.

Christian Buhl, CEO, Geberit: You’re welcome.

Conference Moderator: The next question comes from Martin Flueckiger from Kepler Cheuvreux. Please go ahead.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Sorry, was muted. Two follow ups, please. Regarding the restocking opportunity going forward, what are your expectations today with regards to the outlook for the next three quarters? Now, I realize that or I understood your comment from earlier on, but once the price increase impact on the restocking is behind us, which it should be by now or close to, as of May and going forward, do you expect wholesalers to start restocking based on your market outlook this year? That would be my first question.

Christian Buhl, CEO, Geberit: So in general, I think wholesalers also take into account what will happen in the market going forward because they need to ensure the availability of the product at best cost. So if wholesalers on a broader range believe the market should go up or will go up, I would assume they started to build up their inventories to a certain extent and the same they did and they will do if the market were to go down. And if we talk to our wholesalers coming back to the fair in March, important wholesalers, for example, in Germany, they have a similar view on the market than we have that we might expect, especially in Germany, a stabilization of the market in the course of the year.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Okay. That’s interesting. And then my second follow-up question is on your pricing comment. We’ve or you guys have only talked about slight price negative price increase. I was just wondering whether we could quantify that a little bit because from an earlier question, it seemed like it could be larger than minus 1%, which I thought it wasn’t.

So we’re talking about less or more than 1%?

Christian Buhl, CEO, Geberit: No, no. It was less than minus 1%, around minus 0.5%, both effects. The technical effects from bonuses versus sales price increase and the Swiss selected price increase in Switzerland, they both together had an effect of maybe around minus 0.5%, so relatively small.

Martin Flueckiger, Analyst, Kepler Cheuvreux: Perfect. Thank you so much.

Conference Moderator: We have another follow-up question from Yassine Tuare from On Field Investment Research. Please go ahead.

Yassine Touhari, Analyst, On Field Investment Research: Just a follow-up question on China. Do you could you give us an order of magnitude of your purchase from China? And as China is cannot export to The U. S, do you see any potential decline in raw material costs from Chinese raw material?

Christian Buhl, CEO, Geberit: So the biggest share of products we or components we buy in China is for China. So we have a very low share of sourcing in China for markets in Europe and also in The U. S. So that’s the reason why we also, on a global perspective, we don’t expect any major impact of this tariff war.

Yassine Touhari, Analyst, On Field Investment Research: Thank you very much.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.