Results

High profitability further improved

The results in 2019 were no longer impacted by one-off costs related to the Sanitec acquisition, which is why adjusted figures will no longer be shown as of the reporting year. The following result comparisons relate to adjusted prior year figures.

The operating cashflow (EBITDA) rose by 4.2% to CHF 904 million, its highest ever level in Geberit’s history despite the negative currency effects. The EBITDA margin grew from 28.2% in the previous year to 29.3%. The increase in the EBITDA margin compared with the previous year was above all attributable to lower raw material prices, higher net sales volumes, an improved product mix and price increases as well as to enhancements in efficiency and high cost discipline. In addition, a change to the IFRS accounting standard had a positive impact on the EBITDA development. Strong tariff-related increases in personnel expenses and one-off costs in connection with brand harmonisation had a negative effect. As a result of the strategy of striving for natural currency hedging, the currency development did not have any negative impact on the operating margin.

Operating profit (EBIT) rose by 1.7% to CHF 757 million, and the EBIT margin reached 24.5% (previous year 24.2%). Net income rose by 3.3% to CHF 647 million (previous year CHF 626 million), which led to a return on net sales of 21.0% (previous year 20.3%). The slightly disproportionate growth when compared with operating profit was due to an improvement in the financial result and a slightly lower tax rate. Earnings per share were up by 4.4% to CHF 17.97 (previous year CHF 17.21).

Operating expenses under control

All items within operating expenses were affected by positive currency effects. The cost of materials dropped by 3.7% to CHF 860 million, representing a lower share of net sales at 27.9%, compared to 29.0% in the previous year. This decline was due to lower prices of raw materials – both industrial metals and plastics – as well as positive mix effects. Personnel expenses rose by 1.1% to CHF 752 million, which equates to 24.4% of net sales (previous year 24.2%). This increase was due to strong tariff-related increases in salaries and higher personnel expenses needed for handling greater volumes as well as new recruiting at various sales companies. Depreciation rose to CHF 127 million (previous year CHF 105 million) primarily as a result of a change in the IFRS accounting standard. Amortisation of intangible assets increased slightly to CHF 20 million (previous year CHF 19 million). Other operating expenses fell by 1.5% to CHF 567 million despite the increased marketing expenses as a result of brand harmonisation.

The net financial result improved to CHF -14 million (previous year CHF -20 million) due to lower currency losses and extraordinary financing costs that had arisen in the previous year. Tax expenses grew from CHF 90 million to CHF 96 million. This resulted in a tax rate of 12.9% (previous year 13.1%).

Further significant increase in free cashflow

The higher operating cashflow in particular as well as lower investments in net working capital compared to the previous year and lower cash tax payments had a positive impact on cashflow. However, the slight increase in investments in property, plant and equipment compared with the previous year had a negative effect. All in all, free cashflow increased by 10.7% to CHF 644 million despite negative currency effects (see also Financial Statements of the Geberit Group, Notes to the Consolidated Financial Statements, 28. Cashflow figures). The free cashflow margin reached 20.9% (previous year 18.9%). CHF 436 million, or 67.7% of the free cashflow, was distributed to shareholders during the reporting year as part of the dividend payment and the share buyback programme.