Geberit Ag · SIX:GEBN
Geberit — FY2020 Earnings Presentation
60 slides from Geberit's earnings presentation, Mar 10, 2021
Slide 1: Analyst conference Full year results 2020
Analyst conference Full year results 2020 Christian Buhl, CEO Roland Iff, CFO March 10, 2021
Slide 2: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 2 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 3: Key figures 2020 – Strong results despite COVID-19 crisis
Key figures 2020 – Strong results despite COVID-19 crisis Net sales (c.a.) EBITDA margin +1.3% 31.0% • Net sales growth in local currencies +170 bps vs PY • Increase of operational and profit margins EPS (c.a.) Free cashflow (in CHF) • Disproportional growth of all bottom-line results in +6.0% 717 m
Slide 4: Sales & marketing 2020 – Increased customer presence
Sales & marketing 2020 – Increased customer presence Digital Physical Customer contacts Customer trainings [# contacts] [# participants] +9% +114% 435′000 472′000 79′000 1/3 • Fast switch from physical customer 37′000 2/3 2/3 interactions to digital interactions 1/3 2019 2020 2019 2020 • More custom
Slide 5: Sales & marketing 2020 – Examples of digitalized customer events
Sales & marketing 2020 – Examples of digitalized customer events “Geberit WebFair” (“Technical“ Pull) • Virtual fair replaced fairs in Germany during 1st lockdown • Different formats (3D-tour, webcast, podcast) • 16’100 visits • Focus on IFS and RLS (Know-How Installed) “Geberit Virtual Showroom” (“
Slide 6: Sales & marketing 2020 – Digital activities for professionals
Sales & marketing 2020 – Examples of digital activities for professionals Duofix/GIS calculation tool • New web-based calculation tool to plan and dimension Duofix/GIS pre-wall systems • Appropriate for small projects and bathroom renovation • Quick and easy to use • Rolled out in CH and DE Building
Slide 7: Sales & marketing 2020 – Digital activities for end consumers
Sales & marketing 2020 – Examples of digital activities for end consumers Digital end consumer campaign • Targeted B2C campaign “Better Bathrooms, Better Lives” • Online videos, banners, Google search, editorial content • Further rolled out in 12 markets Integrated website with B2C section • Enriche
Slide 8: Marketing 2020 – Brand portfolio simplification completed
Marketing 2020 – Brand portfolio simplification completed 2019 2020 • Phase-out of 4 ceramic brands (Keramag, Sphinx, Allia, Pozzi- Ginori) and replacement with Geberit brand • Key benefits − Improved customer support 2020 2020 − Simplified cross- and upselling − Reduced complexity in operations and
Slide 9: Marketing 2020 – Marketing expenditure
Marketing 2020 – Marketing expenditure Digital Others % of net sales Marketing expenditure CHF million 118 108 112 105 95 • Significantly lower marketing spend due to COVID-19 restrictions 27 • Acceleration of digital marketing activities (e.g. digital trainings, webinars) • 29% of total marketing s
Slide 10: Innovations 2020 – New product introductions
Innovations 2020 – New product introductions Geberit Renova Geberit Pluvia support New Geberit New Geberit actuator modernization sets CleanLine80 plates New updated design for Installation elements for New shower channel New modern high-end one of the most roof drainage systems solution, also avail
Slide 11: Innovation 2020 – Continuous strengthening of innovation pipeline
Innovation 2020 – Continuous strengthening of innovation pipeline Pre Sanitec integration Post Sanitec integration R&D expenditure % of net sales CHF million 72 78 78 77 75 63 • Continuously high investments in innovation pipeline • R&D expenditure of 2.5% of net sales 2.4% 2.6% 2.7% 2.5% 2.5% 2.5%
Slide 12: CAPEX 2020
CAPEX 2020 New products Modernisation & rationalisation Capacity expansion CAPEX % of net sales CHF million -10% 162 167 159 • 2020 capital expenditures -10% below 150 139 prior year 24% • Reduced investments due to COVID-19 restrictions 40% • Increased spend for new products driven by new supply pi
Slide 13: Investments 2020 – Capacity expansion & efficiency increase
Investments 2020 – Capacity expansion & efficiency increase Renewal of stainless steel elbow lines, Langenfeld (DE) • Renewal of machinery / tools and efficiency improvement • Start of production in 2020 • CAPEX: EUR 10 million (2020/21) Capacity expansion & efficiency increase, Jona (CH) • Capacity
Slide 14: Continuous productivity improvements – Geberit plants
Continuous productivity improvements – Geberit plants Production volume1 and productivity2, indexed (2014 = 100) Volume1 Productivity2 122 • Productivity improvement of +3.4% in 114 117 118 2020 108 112 100 100 • Average productivity gain of +3.4% p.a. since 2014 • Key drivers − Process improvements
Slide 15: Employees 2020 – Slightly reduced number of employees
Employees 2020 – Slightly reduced number of employees Number of employees, in FTE Internal digital trainings [# training sessions] Total variance: -50 FTEs (-0.4%) +154% 11’619 127′000 -75 11’569 50′000 27 -2 End 2019 Production SG&A R&D Apprentices End 2020 2019 2020 • Reduction of production and l
Slide 16: Sustainability 2020 – Significant reduction of environmental impact since 2015
Sustainability 2020 – Significant reduction of environmental impact since 2015 Environmental impact 2015-2020 • Sustainability strategy and team since 1990 in UBP1 million • Comprehensive sustainability report since 2004 249 239 230 220 • Environmental impact 2020 212 193 − Relative2: -10.1% -35% −
Slide 17: Sustainability 2020 – Significant reduction of CO2 emissions since 2015
Sustainability 2020 – Significant reduction of CO2 emissions since 2015 CO2 emissions (Scope 1&2) 2015-2020 in thousand tonnes • CO2 emissions 2020 − Relative1: -8.4% 258 250 243 231 − Absolute: -7.2% 223 207 -33% • CO2 emissions since Sanitec integration in 2015 − Relative1: -33% − Absolute: -20% •
Slide 18: Sustainability 2020 – Sustainable products reducing CO2 (scope 3)
Sustainability 2020 – Example of sustainable products reducing CO2 (scope 3) Energy saving with Geberit DuoFresh • Odor extraction unit for toilets with ceramic honeycomb filter • No ventilation by opening the window • Annual energy savings equivalent of ~50 liter of heating oil or ~135 kg CO2 per i
Slide 19: Social responsibility 2020
Social responsibility 2020 Products and services Support of disabled and disadvantaged people CHF million • Conscious sourcing from workshops for disabled and disadvantaged 9 • Support of workshops in CH, DE and AT with ~500 disabled people 8 8 7 6 6 • Mainly assembly and packaging work • Increase o
Slide 20: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 20 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 21: FY 2020 – Net sales growth in local currencies of +1.3%
FY 2020 – Net sales growth in local currencies of +1.3% Net sales, CHF million Total: CHF -97 million (-3.1%) 3′083 +39 -136 2′986 Net sales Growth in local currency Currency Net sales FY2019 effect FY2020 +1.3% -4.4% SLIDE 21 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 22: Net sales 2020 – Quarterly growth rates
Net sales 2020 – Quarterly growth rates Net sales Variance to prior year Quarter Comment CHF million % CHF % c.a. Q1 798 -3.9% 1.5% • COVID-19 impact since mid March • Severe impact from COVID-19 crisis and Q2 671 -15.9% -10.7% lockdown H1 1’468 -9.8% -4.5% • Catch-up effects from lockdown in Q2, Q3
Slide 23: Europe – Mature markets
Net sales 2020 – Development in European mature markets Country / Net sales Variance to PY Comment Region CHF million % CHF % c.a. Germany 956 3.1% 7.3% • Restricted but open construction sites in Q2 • COVID-19 driven home improvement trend Europe – Mature markets Austria 176 1.1% 5.0% • Significant
Slide 24: Europe – Expansion markets
Net sales 2020 – Development in European expansion markets Country / Net sales Variance to PY Comment Region CHF million % CHF % c.a. Eastern 286 -6.2% 3.2% Europe • Restricted but open construction sites in Q2 Europe – Expansion markets • Market share gains Nordic • Strong growth of behind-the-wall
Slide 25: Net sales 2020 – Development outside Europe
Net sales 2020 – Development outside Europe Net sales Variance to PY Country / Region Comment CHF million % CHF % c.a. • Strong growth with electronic faucets due to increased America 97 -4.1% 1.7% demand for hygiene-related touchless products • Closed construction sites in India in Q2 Far East / Pa
Slide 26: Net sales 2020 – Development by product areas
Net sales 2020 – Development by product areas Net sales Variance to PY Comment CHF million % CHF % c.a. Installation & • Strong growth with “Behind-the-wall”- Flushing Systems 1’115 -2.6% 2.1% flushing systems Piping Systems • Weakening new build segment and project 903 -4.8% -0.8% business as of H2
Slide 27: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 27 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 28: Key figures 2020
Key figures 2020 CHF million 2020 2019 % YoY Net sales 2’986 3’083 -3.1% • Increased operational profitability despite significant tariff increases due to EBITDA 925 904 2.4% Margin 31.0% 29.3% − COVID-19 related cost savings EBIT 772 757 2.0% Margin 25.8% 24.5% − High flexibility in production and
Slide 29: Income statement 2020
Income statement 2020 CHF million 2020 % 2019 % % YoY Net sales 2’986 100.0% 3’083 100.0% -3.1% Cost of materials 789 26.4% 860 27.9% -8.3% Personnel expenses 750 25.1% 752 24.4% -0.2% Depreciation 127 4.2% 127 4.1% -0.6% Amortisation of intangibles 27 0.9% 20 0.6% 36.7% Other operating expenses, ne
Slide 30: EBITDA margin 2020 – Profitability on high level
EBITDA margin 2020 – Profitability on high level 31.0% -0.0% -0.2% +1.8% 29.3% +0.1% EBITDA Volume and Price effects, Other cost Currency effect EBITDA margin FY 2019 product mix effect net effects margin FY 2020 • Limited impact from volume and product mix effect due to stable volumes • Positive ne
Slide 31: Net income and EPS 2020 – At par with prior year's levels
Net income and EPS 2020 – At par with prior year’s levels CHF million 2020 % 2019 % % YoY Operating profit (EBIT) 772 25.8% 757 24.5% 2.0% Financial result, net -17 -0.6% -14 -0.4% 24.6% Profit before income tax expenses 754 25.3% 743 24.1% 1.5% Income tax expenses 112 3.8% 96 3.1% 16.8% in % pre-ta
Slide 32: Free cashflow 2020 – Strong increase of free cashflow
Free cashflow 2020 – Strong increase of free cashflow CHF million 2020 2019 % YoY EBITDA 925 904 2.4% Changes in net working capital from operating core activities -6 1 Changes in the other positions of the net working capital 32 11 Changes in provisions 29 -4 Income taxes paid -94 -89 Other non-cas
Slide 33: Balance sheet 2020
Balance sheet 2020 CHF million 31.12.2020 31.12.2019 Cash and short-term investments 469 428 Net working capital 181 202 Property, plant and equipment 934 920 Deferred tax assets 126 125 Other non-current assets and non-current financial assets 39 38 Goodwill and intangible assets 1’577 1’597 Total
Slide 34: Dividend 2020 – Proposed increase of +0.9%
Dividend Ex 2020 – Proposed increase of +0.9% CHF thousand 2020 2019 Net income Geberit AG 600’617 549’800 Balance brought forward 3’038 10’211 Total available earnings 603’655 560’011 Transfer to free reserves 190’000 150’000 Proposed / paid dividend 409’495 1 406’973 2 Balance to be carried forwar
Slide 35: New share buyback program launched
New share buyback program launched Share buyback in 2020 Avg. price # ’000 / share Total Share buyback program 2017-2020 completed • Total volume: 1’026’000 shares Share buyback • Total consideration: CHF 440 million 262 CHF 406 CHF 106 million 2017-2020 • Average share price: CHF 429 Share buyback
Slide 36: Free cashflow and distribution to shareholders
FCF margin Free cashflow and distribution to shareholders Payout ratio Free cashflow, CHF million 2’975 644 717 557 476 582 Average FCF margin 2016- 2020 in % of net sales: 20.0% 2016 2017 2018 2019 2020 Total 19.8% 16.4% 18.9% 20.9% 24.0% 20.0% Distribution to shareholders, CHF million Share buybac
Slide 37: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 37 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 38: Geberit was hit hard by 1st lockdown wave
Geberit was hit hard by 1st lockdown wave Geberit net sales, c.a. April May • Geberit was hit hard Geberit Group -15% • Weakest months since decades -29% • Unprecedent sales decline Markets with closed − Severity construction sites -41% IT, FR, UK, ES, IN, ZA (~20% of net sales) − Speed -77% − Simul
Slide 39: Key measures and decisions per end of March
Key measures and decisions per end of March • No restructuring – anti-cyclical investing No restructuring • No change of strategic agenda • Undiminished presence with customers • No voluntary short-time work • Gain market shares – both short- and long-term Leverage crisis • “Housekeeping” and streng
Slide 40: High flexibility in production plants
High flexibility in production plants [Ø industrial minutes/day, Index March = 100] Volume April & May (-18%) Key challenge • Low visibility (< 2 weeks of orderbook) 100 Key actions • Personnel flexibility: Temps, holiday planning, 10 flextime working time models -18% 90 0 • Conscious build-up of in
Slide 41: Key learnings from COVID-19 crisis
Key learnings from COVID-19 crisis • Availability – liquidity, products, customer proximity Key success factors • Flexibility – not short-time work • No over-reaction • Resilient business model Proven crisis resistance • Undiminished pricing power (incl. ceramics business) • Robust supply chain • Va
Slide 42: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 42 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 43: Building construction market outlook 2021
Building construction market outlook 2021 • Still high uncertainties around the COVID-19 pandemic and restrictions (e.g. virus mutations, speed of vaccination) • Different development country per country • Positive and negative building construction drivers in 2021 – overall direction and extent sti
Slide 44: Business split and market drivers 2021
Business split and market drivers 2021 Market drivers 2021 Geberit sales split by segment • Home improvement trend – duration unclear • Benefitting business areas from COVID-19 COVID-19 affected (20%) • Hotels, restaurants, entertainment − Healthcare Non-residential • Offices Positive − Public stimu
Slide 45: Construction market Europe – Decreasing building permits
Construction market Europe – Decreasing building permits % of PY period, in sqm Residential building permits 17% 10% 5% 1% • New build segment representing 40% of Geberit sales exposure 2016 2017 2018 2019 -6% -14% -19% -24% • Substantial building permit decline since Q1 Q2 Q3 COVID-19 crisis – st
Slide 46: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 46 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 47: Product introductions 2021 – Installation & Flushing and Piping Systems
Product introductions 2021 – Installation & Flushing and Piping Systems New supply piping system FlowFit • New pressing technology • Faster, safer and easier installation with only two pressing jaws for all eight diameters • Pressure loss-optimized, allowing smaller diameters and improved hygiene Ne
Slide 48: Product introductions 2021 – Bathroom Systems
Product introductions 2021 – Bathroom Systems Geberit ONE • Extension of assortment • Addressing mid- and upper-price segment • Configurator with >2‘000 washplace combinations • Intuitive lighting concept New rimfree WC • New rimfree WC technology for mid-price segment • Easier installation • Optimi
Slide 49: Product introductions 2021 – Digital products
Product introductions 2021 – Digital products AquaClean remote service • Connection via Geberit Home App • Immediate answer of enquiries • No on-site appointment required • Roll-out in CH and DE Concealed cistern with hygienic flush • Automated flushing to prevent stagnation • Space-saving • Compati
Slide 50: Investments 2021 – Capacity expansion & efficiency increase
Investments 2021 – Capacity expansion & efficiency increase Plant and capacity expansion, Lichtenstein (DE) • Expansion of plant for installation frames and pre-fab installation systems • Additional, fully automated production lines • CAPEX: EUR 40 million (2020-2025) • Payback: 3.1 years Capacity a
Slide 51: Investments 2021 – Capacity expansion & efficiency increase
Investments 2021 – Capacity expansion & efficiency increase Capacity expansion & efficiency increase, Villadose (IT) • Additional extrusion line for drainage piping system Silent-Pro • CAPEX: EUR 4 million (2020/21) • Payback: 2.9 years Capacity increase for wall hung toilets, Ekenäs (FI) • New full
Slide 52: Digitalisation outlook 2021 – Further investments in key areas
Digitalisation outlook 2021 – Further investments in key areas Additional Digitalisation efforts 2021 • Extension of capacity for digital product testing and digital product quality • Increased yearly spending of CHF 15 • Strengthening of dedicated team on million as of 2021 software, connectivity a
Slide 53: Marketing outlook 2021
Marketing outlook 2021 Marketing expenses 2021 • 2020: COVID-19 related restrictions lead to marketing savings of CHF 25 million • 2021: Aim of normalized Marketing spend again incl. new/additional digital event formats Example for new digital event format: Geberit Innovation Days • Alternative to c
Slide 54: Raw material outlook – Significant increase of price levels since Dec 2020
Raw material outlook – Significant increase of price levels since Dec 2020 Geberit: Monthly raw material prices Index: Jan 2020 = 100 2020 2021 • Drop of raw material prices as of April 2020 104 due to COVID-19 crisis • Significant increase of raw material prices 102 since December 2020 • Expected r
Slide 55: Agenda
Agenda Overview C. Buhl Sales development C. Buhl Financial results R. Iff COVID-19 C. Buhl Building construction outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl SLIDE 55 ANALYST CONFERENCE - FY 2020 MARCH 10, 2021
Slide 56: Summary – Geberit with a very good year 2020 despite crisis
Summary – Geberit with a very good year 2020 despite crisis • Very good results despite COVID-19 crisis • Further market share gains • Successful crisis management – focus on customer relations and flexibility • No lay-offs, salary cuts, material short-time work or financial support from public sect
Slide 57: Summary – Outlook 2021
Summary – Outlook 2021 • Ongoing uncertainties around COVID-19 • Positive and negative market drivers in 2021 – overall direction unclear • Significant increase of raw material prices since December 2020 – significant headwind as of Q2 • Key priorities for Geberit 2021 − Further digitalisation of Ma
Slide 58: Summary – Strong fundamentals delivering industry leading long-term results
Summary – Strong fundamentals delivering industry leading long-term results • Focused strategy with execution capabilities Net sales (c.a.) EBITDA (c.a.) EPS (c.a.) • Decision maker oriented business model +8.0% +8.6% +9.5% CAGR 2014-20 CAGR 2014-20 CAGR 2014-20 • Innovation & sustainability focus •
Slide 59: Important dates in 2021
Important dates in 2021 • April 14, 2021 • Annual general meeting • April 20, 2021 • Dividend payment • May 4, 2021 • Interim report first quarter 2021 • Media release and conference call • August 19, 2021 • Information on the half-year results 2021 • Media release and conference call • November 3,
Slide 60: Disclaimer
Disclaimer While Geberit is making great efforts to include accurate and up-to-date information, we make no representations or warranties, expressed or implied, as to the accuracy or completeness of the information provided in this handout and disclaim any liability for the use of it. The statements