Integrated Annual Report 2015
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Environment for the construction industry will remain challenging

The situation in the construction industry will remain challenging. The individual regions/markets and construction sectors are developing very differently. In Europe, there are signs that the construction industry could stabilise. For markets such as Germany, the United Kingdom, the Netherlands and Poland, a positive market environment is expected. No growth is forecasted for the Swiss and Austrian construction industry. In the Italian and French markets, which have been in crisis in recent years, a few indicators point towards a stabilisation. In North America, moderate growth is predicted in the public sector construction industry, which is important to Geberit's business in the USA, along with a continued recovery in residential construction. The Far East/Pacific region will be shaped by a further weakening in China in the residential construction segment. In the Middle East/Africa region, the outlook in South Africa remains positive, whereas in the Gulf States a slowing of activities is expected in the construction industry, due to the low oil price.

Fluctuations in the Swiss franc will continue to affect sales and earnings. Gains and losses result mainly from the translation of local results into Swiss franc (translation effects). In general, the effects of currency fluctuations on margins are warded off as far as possible with an efficient natural hedging strategy. This entails making sure that costs in the various currency areas are incurred in the same proportion in which sales are generated. The integration of the Sanitec business did nothing to change this situation. The influence of currency fluctuations on operating profit margins is relatively small due to the natural hedging strategy. The 10% currency rebate introduced at the start of February 2015 in the Swiss market, in response to the stronger Swiss franc, was transferred to the 2016 price list. With regard to the impact of foreign currency effects, please refer to the information and the sensitivity analysis in the  Management of currency risks section.

In the first half of 2016, the level of raw material prices is likely to be slightly below the prior-year period - driven mainly by lower prices of industrial metals and special plastics. It is unwise at present to give any more detailed forecasts, given the uncertain environment.


The Geberit Group’s 2016 financial year is expected to be further impacted by the integration of Sanitec’s activities. Since 1 January 2016, the sales organisation is operating as a single company in all markets; another focus shall also be on the further harmonisation of systems and processes and realising initial synergies. Just as important shall be the focus on Geberit’s daily business, which is expected to be a challenging undertaking once again owing to the situation in the European construction markets. The objective shall be to provide convincing services in all markets with the new joint sales team and, as in previous years, gain market shares. The main focus shall fall on the concerted marketing of the new products introduced in recent years, the more intense penetration of markets in which Geberit products or technologies are still under-represented and on the very promising shower toilet business. In line with the Geberit strategy, these measures shall be accompanied by efforts to continuously optimise business processes.

The Board of Directors and the Group Executive Board are convinced that the company is very well equipped for the upcoming opportunities and challenges. The opportunities offered as a result of combining technical know-how in sanitary technology “behind the wall” and design expertise “in front of the wall” will be firmly seized. Experienced and highly motivated employees, a number of promising products that have been launched in recent years and product ideas for the more distant future, a lean and market-oriented organisation, an established cooperation based on trust with our market partners in both commerce and trade, and the Group’s continued solid financial foundation following the acquisition of Sanitec are vital to our future success.