Strong financial foundation
Once again, the substantial contribution from free cashflow allowed the attractive dividend policy to be continued and a share buyback program to be launched while also maintaining the very solid financial foundation of the Group.
Total assets increased from CHF 2,226.0 million to CHF 2,431.5 million, mainly as a result of a higher reserve of liquid funds and a planned slight increase in inventories.
The cash reserve increased substantially, as the share buyback program launched at the end of April has been suspended since the end of July 2014 due to the Sanitec acquisition, and no further shares were repurchased as a result. In addition to liquid funds and marketable securities of CHF 749.7 million (previous year CHF 612.8 million), the Group had access to an undrawn operating credit line for the operating business of CHF 347.8 million. At CHF 10.5 million, debts were slightly under the previous year’s value of CHF 11.7 million. This resulted in positive net cash of CHF 739.2 million at the end of 2014 (previous year CHF 601.1 million).
Net working capital increased by CHF 41.2 million to CHF 169.1 million compared to the previous year. Property, plant and equipment strengthened from CHF 536.4 million to CHF 550.9 million, while goodwill and intangible assets practically remained at the previous year’s level at CHF 645.3 million.
The ratio of net cash to equity (gearing) increased from -36.1% in the previous year to -43.0%. The equity ratio reached a solid 70.6% (previous year 74.8%). Based on average equity, the return on equity (ROE) was 29.2% (previous year 28.2%). Average invested operating capital, comprising net working capital, property, plant and equipment, and goodwill and intangible assets amounted to CHF 1,404.5 million at the end of 2014 (previous year CHF 1,366.0 million). The return on invested capital (ROIC) was 35.5% (previous year 32.1%). For details on the gearing, ROE and ROIC calculations, please refer to the Financial Statements of the Geberit Group, Notes to the Consolidated Financial Statements, 5. Management of Capital.
The Geberit Group held 302,060 treasury shares on December 31, 2014, which equals 0.8% of the shares entered in the Commercial Register. Of these, 123,000 (0.3% of the shares entered in the Commercial Register) were acquired as part of the share buyback program that started in 2014. The remaining 179,060 shares are mostly earmarked for share participation plans. The total number of shares entered in the Commercial Register stands at 37,798,427 shares. The aforementioned share buyback program announced in March 2014 was launched on April 30, 2014. In the course of this program, shares amounting to a total of a maximum of 5% of the share capital recorded in the Commercial Register will be repurchased over a period of two years, less withholding tax, and retired by means of a capital reduction. This share buyback program has been suspended since July 2014 as a result of the acquisition of the Sanitec Group. The Board of Directors will decide whether to resume the program at the appropriate time.