Medium-term goals
Geberit has set itself the goal of establishing new standards for sanitary products, continually developing these standards and thereby gaining market shares. Among other things, this approach yields net sales growth that outstrips the industry average. Basically, Geberit is aiming to achieve its net sales targets while at the same time maintaining its industry leadership in terms of profitability and the ability to generate high cashflows.
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 the Geberit Group’s expected growth and be prepared for upcoming major projects, greater investments are currently being made in property, plant and equipment – around 6% of net sales during each of the next two to three years.
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 (wholesalers, plumbers and sanitary engineers, architects, general contractors, investors, showroom operators)
- Technology penetration, which involves replacing outdated technologies with new, more innovative sanitary products and systems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 penetration
- Geberit AquaClean initiative, 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 and to get additional competitive advantages
- Continuous process and cost optimisation to protect the high operating margins
