Annual Report 2016

Net sales

Very good sales development

Cumulative net sales in 2016 increased by 8.3% to CHF 2,809.0 million. Total growth comprised organic growth in local currencies of 6.4%, a foreign currency effect of +0.7% and an acquisition- and divestment-related increase of 1.2%.

The net sales for the second half of 2015 of the Koralle Group (sold at the end of June 2016) and the net sales for January 2016 of the Sanitec Group (acquired in February 2015) were not included in the calculation of organic growth. The net effect of these eliminations amounted to CHF 31.7 million.

The currency gains contained in net sales amounted to CHF 18 million. In 2016, 62% of net sales were generated in euros, 10% in Swiss francs, 5% in US dollars and 4% in British pounds.

Net sales development 2007 – 2016

(in CHF million)

The following changes in net sales in the markets and product areas relate to currency-adjusted, organic developments.

Convincing developments in European markets

The biggest region, Europe, grew by 6.8%. Austria (+12.3%), the Nordic Countries (+11.1%) and Central/Eastern Europe (+10.4%) posted double-digit growth. The other European markets/countries also reported convincing growth, with +7.9% for the Benelux Countries, +6.5% for the Iberian Peninsula, +6.4% for Switzerland, +5.4% for United Kingdom/Ireland, +4.8% for France, +4.7% for Germany and +3.9% for Italy. Far East/Pacific (+4.3%), Middle East/Africa (+3.5%) and America (+0.2%) posted below-average growth compared to the European markets.

Net sales by markets/regions 2016

Sanitary Systems reported strongest growth

Net sales for the Sanitary Systems product area amounted to CHF 1,263.5 million, corresponding to growth of 9.2%.

Net sales for the Installation Systems product line, at 28.1% of Group net sales the most important product line, rose by 8.0%. This growth was strongly supported by the drywall elements, high-quality actuator plates and the synergies that were realised from the Sanitec integration. Growth of 14.3% was posted by the Cisterns and Mechanisms product line, which accounts for 9.1% of total net sales. This above-average growth was driven by the reduction of the order backlog for the newly-launched premium shower toilet AquaClean Mera on the one hand, and on the other by continued strong demand for the Monolith WC module. Net sales for the Faucets and Flushing Systems product line, which accounts for 4.4% of total net sales, increased by 3.0% in 2016. The below-average result for this product line was due to the difficult market conditions faced by the US subsidiary Chicago Faucets in business with schools and hospitals. Sales of urinal systems, however, trended very well. Net sales for the Waste Fittings and Traps product line rose by 14.3%. The share of total Group net sales came to 3.4%. This product line posted the strongest growth of all, primarily because of the great success of the CleanLine shower channel launched in the market in the previous year.

Net sales for the Piping Systems product area increased by 2.5% to CHF 823.8 million. As in the previous year, growth for this product area lagged behind Sanitary Systems.

Building Drainage Systems grew by 4.4%. The share of total net sales reached 10.7%. The Silent-PP sound-insulating drainage system and the PE drainage system experienced positive development. Sales for the Supply Systems product line increased by 1.4%. This product line contributed 18.6% to total net sales. The product line was burdened by the carbon steel piping systems, which suffered from low copper prices. Stainless steel piping systems, however, reported encouraging growth.

The Sanitary Ceramics product area posted organic, currency-adjusted growth of +6.5% to CHF 721.7 million. Measured for the year as a whole (inclusive of Sanitec’s sales for January 2016), currency-adjusted growth was +4.9%.

The Bathroom Ceramics product line grew by 8.3%. The contribution of this product line, which is the second largest measured by Group net sales, came to 20.0%. Wall-hung WC ceramic appliances and WC seats were the most important drivers of growth. Net sales for the Ceramics Complementary Products product line, which accounted for 5.7% of Group net sales, improved by 0.7%. This comparatively low growth rate was due to the fact that the installation systems of the former Sanitec, which fall under this product line, are increasingly being substituted by Geberit systems.

Net sales by product areas and product lines 2016