Medium-term goals

Geberit has set it­self the goal of being the stan­dard-bearer for san­i­tary prod­ucts, con­tin­u­ally de­vel­op­ing those prod­ucts in a sus­tain­able way and thereby gain­ing mar­ket shares. Among other things, this ap­proach yields sales growth that out­strips the in­dus­try av­er­age. Ba­si­cally, Geberit is aim­ing to achieve its sales tar­gets while at the same time main­tain­ing its in­dus­try lead­er­ship in terms of prof­itabil­ity and the abil­ity to gen­er­ate high cash­flows.

The medium-term goals were reap­praised in au­tumn 2015 fol­low­ing the ac­qui­si­tion of San­itec and the switch­ing of re­port­ing to net sales from the 2015 fi­nan­cial year on­wards. Once the San­itec busi­ness has been suc­cess­fully in­te­grated, from 2018 on­wards the growth in net sales in local cur­ren­cies, after ad­just­ments for ac­qui­si­tions, is ex­pected to be be­tween 4 and 6 per­cent in the medium term as an av­er­age over one eco­nomic cycle, and an op­er­at­ing cash­flow (EBITDA) mar­gin of be­tween 28 and 30 per­cent is ex­pected to be achieved. A third quan­ti­ta­tive tar­get has also been set: re­turn on in­vested cap­i­tal (ROIC), which from 2018 is ex­pected to reach 25 per­cent.

2017 and 2018 will each see around CHF 150 mil­lion in­vest­ments in prop­erty, plant and equip­ment in order to achieve the ex­pected growth, for up­com­ing larger pro­jects and due to the in­te­gra­tion of the San­itec busi­ness.

Fur­ther growth through ac­qui­si­tions has not been ruled out. How­ever, any po­ten­tial ac­qui­si­tion will have to sat­isfy strict strate­gic and fi­nan­cial cri­te­ria.

The fol­low­ing growth and earn­ings dri­vers are cru­cial to achiev­ing the am­bi­tious medium-term goals:

1. “Push-Pull” sales model, which con­cen­trates on the key de­ci­sion-mak­ers in the in­dus­try
2. Tech­nol­ogy pen­e­tra­tion, which in­volves re­plac­ing out­dated tech­nolo­gies with new, more in­no­v­a­tive san­i­tary prod­ucts and sys­tems
3. Value strat­egy, to in­crease the pro­por­tion of higher-added-value prod­ucts – par­tic­u­larly in mar­kets in which Geberit prod­ucts al­ready have a high de­gree of mar­ket pen­e­tra­tion
4. Geberit Aqua­Clean, to fur­ther ex­pand the shower toi­let cat­e­gory in Eu­rope
5. In­no­va­tion lead­er­ship in the san­i­tary in­dus­try, in order to set new stan­dards
6. Con­tin­u­ous process and cost op­ti­mi­sa­tion