Financial report  >  Consolidated financial statements Geberit Group

Notes to the Consolidated Financial Statements

  1. 1. Basis of preparation

  2. 2. Changes in Group organization

  3. 3. Summary of significant accounting policies

  4. 4. Risk assessment and management

  5. 5. Management of capital

  6. 6. Marketable securities

  7. 7. Trade accounts receivable

  8. 8. Other current assets and current financial assets

  9. 9. Inventories

  10. 10. Property, plant and equipment

  11. 11. Other non-current assets and non-current financial assets

  12. 12. Goodwill and intangible assets

  13. 13. Short-term debt

  14. 14. Other current provisions and liabilities

  15. 15. Long-term debt

  16. 16. Derivative financial instruments

  17. 17. Retirement benefit plans

  18. 18. Participation plans

    Share plans

    In 2012, employees were able to purchase a limited number of shares at a discount of 50% (PY: 30%) compared to the market price (“Employee share plan 2012”). The Geberit management was entitled to draw the previous year’s results-related salary partly or entirely in shares valued at market price (“Management share plans 2012”). For each of these shares, the management participants received one option (see part 2: “Option plans”). As part of the “Directors program 2012”, the non-executive members of the Board of Directors received their annual compensation in shares of Geberit AG at a discount of 50% (PY: 30%). All share plans are subject to blocking periods which are valid beyond the period of employment.

    The share plans introduced in 2012 are summarized below:

      End of
    blocking
    period
    Number of
    participants
    Number of
    shares
    issued
    Issuing
    price
    CHF
    Employee share plan 2012 (ESPP) 2014 1,639 26,440 96.43
    Management share plans 2012 (MSPP) 2015 58 15,809 192.85
    Directors program 2012 (DSPP) 2014 7 8,060 96.43

    The 50,309 shares required for these plans were taken from the stock of treasury shares.

    As of December 31, 2012, the Board of Directors, the Group Executive Board and the employees owned a combined total of 370,045 (PY: 812,624) shares, i.e. 1.0% (PY: 2.0%) of the share capital of Geberit AG.

    Option plans

    For each of the shares purchased in connection with the “Management share plans 2012”, the Geberit management received one option to purchase an additional share at a 1:1 ratio. The exercise price of the options is equal to the price at which the underlying shares were allocated. The options can be exercised after vesting periods of two years. They lapse if not exercised within five years of the grant date.

    In connection with an additional option plan (“Option plan 2012”), the managing directors and members of the Group Executive Board were entitled to additional options with a term to maturity of five years and a vesting period of two and four years, respectively.

    The following is a summary of the options allocated in 2012:

      End of
    vesting
    period
    Maturity Number of
    participants
    Number of
    options
    allocated
    Exercise
    price
    CHF
    Management share plans 2012 (MSPP) 2014 2017 58 15,809 192.85
    Option plan 2012 type A (MSOP) 2014 2017 63 36,860 196.15
    Option plan 2012 type B (MSOP) 2016 2017 63 36,860 205.50
    Total       89,529  

    The fair value of the options granted in 2012 amounted to CHF 26.97 for MSOP type A (two-years vesting period), CHF 24.47 for MSOP type B (four-years vesting period) and CHF 31.43 for MSPP (two-years vesting period) at the respective granting dates. The fair value was determined using the binomial model for “American Style Call Options”.

    The calculation model was based on the following parameters:

      Reference share price 1 Surcharge Exercise
    price
    Expected
    volatility
    Expected Ø
    dividend yield
    Contractual
    period
    Riskfree
    interest
    rate
      CHF % CHF % % Years %
    Management share plans 2012 (MSPP) 192.85 0 192.85 26.03 3.44 5 0.325
    Option plan 2012 type A (MSOP) 186.82 5 196.15 25.92 3.56 5 0.216
    Option plan 2012 type B (MSOP) 186.82 10 205.50 25.92 3.56 5 0.216
    1 The reference share price corresponds to the average share price of the Geberit shares for the period from 5.1.2012 to 18.1.2012 for MSOP and from 1.3.2012 to 14.3.2012 for MSPP, respectively.

    The following table summarizes all option plans in place as of December 31, 2012:

    End of
    vesting
    period
    Maturity   Number of
    options
    outstanding
    Ø exercise
    price
    CHF
    Number of
    options in
    the money
    Ø exercise
    price
    CHF
    Lapsed 2013 - 2015   45,972 168.12 45,972 168.12
    2013 2014 - 2016   74,230 161.71 53,513 140.07
    2014 2015 - 2017   73,526 198.40 52,669 195.16
    2015 2016   20,717 228.00 0 0
    2016 2017   36,860 205.50 0 0
    Total     251,305 185.51 152,154 167.62

    The following movements took place in 2012 and 2011:

        MSOP     MSPP     Total 2012     Total 2011
      Number of
    options
    Ø exercise
    price
      Number of
    options
    Ø exercise
    price
      Number of
    options
    Ø exercise
    price
      Number of
    options
    Ø exercise
    price
        CHF     CHF     CHF     CHF
    Outstanding January 1 213,627 175.53   53,083 173.69   266,710 175.17   315,520 152.30
    Granted options 73,720 200.83   15,809 192.85   89,529 199.42   58,203 217.14
    Forfeited options 3,797 170.61   1,282 190.50   5,079 175.64   17,975 173.75
    Expired options 29,930 216.47   13,490 196.30   43,420 210.20   0 0
    Exercised options 46,261 143.14   10,174 129.05   56,435 140.60   89,038 121.85
    Outstanding December 31 207,359 185.93   43,946 183.49   251,305 185.51   266,710 175.17
    Exercisable at December 31 30,783 171.43   15,189 161.12   45,972 168.12   38,036 121.37

    The 251,305 options outstanding represent 0.6% of the outstanding shares of Geberit AG. The Group hedges this exposure with treasury shares.

    The options outstanding at December 31, 2012 had an exercise price between CHF 96.50 and CHF 228.00 and an average remaining contractual life of 2.7 years.

    Costs resulting from participation plans amounted to MCHF 3.7 in 2012 (PY: MCHF 1.7), those for option plans totaled MCHF 2.3 (PY: MCHF 2.3).

  19. 19. Deferred tax assets and liabilities

  20. 20. Other non-current provisions and liabilities

  21. 21. Contingencies

  22. 22. Capital stock and treasury shares

  23. 23. Earnings per share

  24. 24. Cash discounts and customer bonuses

  25. 25. Other operating expenses, net

  26. 26. Financial result, net

  27. 27. Income tax expenses

  28. 28. Cashflow figures

  29. 29. Segment reporting

  30. 30. Related party transactions

  31. 31. Foreign exchange rates

  32. 32. Subsequent events

  33. 33. Additional disclosures on financial instruments

  34. 34. Group companies as of December 31, 2012