Sanitary technology group defies crisis: Geberit slightly increases operating profit and raises dividend in 2023

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Sanitary technology group Geberit increased its operating profit slightly in fiscal 2023 compared to the previous year. However, net profit fell due to tax impact. The dividend should still be increased slightly.

The company announced on Wednesday that its operating profit (EBITDA) increased by 1.4 percent to 921 million francs. At the same time, the corresponding margin increased by 3.1 points to 29.9 percent; This roughly corresponds to the value estimate in January.

According to Geberit, this increase was due to operational flexibility, especially in factories and logistics, low raw material and energy prices and consistent price management. The strong franc had a negative impact.

Decrease in net profit

However, net profit fell by 12.6 percent to 617 million francs due to a non-recurring one-off positive impact compared to the previous year. In addition, the financial result was slightly more negative than the previous year.

Although the profit will fall to 12.70 francs, the dividend will still be increased by 10 cents. This will be the thirteenth dividend increase in a row. With the figures presented, Geberit almost met analysts’ expectations.

Difficult year for the construction industry

Sales were already announced in January: down 9.1 percent to 3.08 billion francs. Excluding negative exchange rate effects, there was a more moderate organic decline of 4.8 percent. Geberit explained falling sales in January as the financial year was characterized by an extraordinarily challenging environment due to the decline of the construction industry in Europe.

However, exchange rate effects also suppressed sales. The resulting negative impact is estimated at 147 million francs. Price increases had a positive impact of around 8 percent on sales.

There is no clear view

Geberit is not yet very specific in its outlook for fiscal 2024. The company said it expects “high” margins and “strong” free cash flow.

Despite the generally negative forecasts for the European construction sector in 2024, it is stated that the interest rate cuts expected throughout the year and the structural trend towards higher health standards should stimulate demand positively.

Overall, a decline in the construction industry is expected due to challenging macroeconomic conditions and ongoing geopolitical risks. (SDA)

Source :Blick