Unchanged environment expected in the construction industry

Geopolitical risks have increased substantially, leading to more instability and volatility in the global economy. Despite this, the forecasts for 2020 for the construction industry have not changed fundamentally compared to the previous year. Although difficult to assess, the Corona virus might impact the global economy on the demand and the supply side. A market outlook – in particular for markets like China or Italy – is therefore very difficult. The following outlook is based on the assumption that the Corona virus will not have a longer lasting negative impact on the construction industry. Considering this, the global construction industry is supposed to remain largely stable, however, the individual countries will perform differently. In Europe, a continued positive – but inconsistent – market environment is expected on the whole. Growth in certain markets is expected to slow down, mainly as a result of the number of building permits in residential construction, which has fallen for the first time since 2013. Despite healthy demand, growth potential in Germany will remain limited due to capacity constraints of installers. In the Nordic Countries, the situation for the individual countries looks mixed, with at best a stagnating market environment overall. In Switzerland, a slight decline in the market is expected as a result of a weaker performance in residential construction. While the market environment in Austria is expected to remain positive, the construction industry in Italy and France is likely to stagnate. The Eastern European markets are predicted to perform differently, with a positive environment in Poland, stagnation in Russia and challenging conditions in Turkey. In the United Kingdom, the construction market is likely to stabilise following the downturns experienced in the past two years. In the Benelux Countries, solid growth is expected in Belgium, with a flat market trend forecast in the Netherlands due to stricter environmental regulations. In North America, a slight downturn is predicted in the institutional construction industry – which is important to Geberit’s business in the US. In the Middle East/Africa region, the market environment in the Gulf region will be defined by the ongoing political instability and liquidity problems, which makes a prediction extremely difficult. For South Africa, forecasts are cautious as a result of the uncertain economic development. In the Far East/Pacific region, continued moderate growth is expected in the Chinese residential construction sector. Whilst growth expectations in building construction in India are limited by the lack of liquidity, a continued decline in the construction industry is likely in Australia.

Currencies and raw materials

Fluctuations in the Swiss franc compared to other important currencies used by the Geberit Group will continue to affect sales and earnings. Gains and losses result mainly from the translation of local results into Swiss francs (translation effects). However, currency fluctuations generally have no significant impact on operating margins due to natural currency hedging. Natural currency hedging entails making sure that costs in the various currency areas are incurred in the same proportion in which sales are generated. With regard to the impact of foreign currency effects, please refer to the information and the sensitivity analysis in the Management of currency risks section. Increasing geopolitical risks and ongoing trade disputes mean that it remains very difficult to provide an outlook on the development of the raw material markets. As things currently stand, lower raw material prices are expected for the first quarter of 2020 compared to the fourth quarter of 2019.


The objective is to perform strongly in all markets and, as in previous years, to gain further market shares. To this end, a particular focus is to be placed on new products that have been introduced in recent years, on markets in which Geberit products or technologies are still under-represented, as well as on the further expansion of the shower toilet business making all together an important contribution to this. In line with the Geberit strategy, these measures shall be accompanied by efforts to continuously optimise business processes in order to be able to achieve continued high margins and a strong free cashflow also in 2020.

The Board of Directors and the Group Executive Board are convinced that the company is very well equipped for the upcoming opportunities and challenges. The possibilities offered as a result of combining technical know-how in sanitary technology “behind the wall” and design expertise “in front of the wall” will continue to be firmly seized. Focal points in 2020 will be the implementation of the digitalisation strategy and the continued brand harmonisation. Experienced and highly motivated employees, a number of promising products that have been launched in recent years and product ideas for the more distant future, a lean and market-oriented organisation, an established cooperation based on trust with the market partners in both commerce and trade, and the Group’s continued solid financial foundation are vital to its future success.


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