Geberit has set itself the goal of being the standard-bearer for sanitary products, continually developing these 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. With the Sanitec business having been successfully integrated from an organisational, procedural and instrumental standpoint in 2017, 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 is expected to reach 25 percent in the medium term.
To achieve our expected growth and be prepared for upcoming major projects, the coming years will see continual investments in property, plant and equipment – with 2018 and 2019 each seeing investments of around CHF 180 million.
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:
- “Push-Pull” sales model, which concentrates on the key decision-makers in the sanitary industry
- Technology penetration, which involves replacing outdated technologies with new, more innovative sanitary products and systems
- 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
- Geberit AquaClean, to further expand the shower toilet category in Europe as well as Geberit's market position in this category
- Innovation leadership in the sanitary industry, in order to set new standards
- Continuous process and cost optimisation