Geberit Ag · SIX:GEBN
Geberit — FY2005 Earnings Presentation
38 slides from Geberit's earnings presentation, Mar 16, 2006
Slide 1: Investor Presentation Full Year Review 2005
Investor Presentation Full Year Review 2005 A.M. Baehny - CEO R. Iff - CFO
Slide 2: Agenda
Investor presentation Agenda ! Overview A. M. Baehny ! Sales development A. M. Baehny ! Financial results R. Iff ! Summary A. M. Baehny Geberit AG, 16 March 2006 2
Slide 3: 2005 in review: Results
2005 in review Results ! Full year results were better than expected due to a very strong second half ! Group sales advanced by 0.8% to CHF 1‘923 Mio., or +5% curr.adj./org. ! All the regions performed well, except North America ! EBITDA-Margin of 23.7% at previous year level ! Net income rose by 35
Slide 4: 2005 in review: Core topics 2005
2005 in review Core topics 2005 Acquisitions and cross-functional topics Europe ! Four key issues in focus North America ! Four key issues in focus Far East / Pacific ! Four key issues in focus ! Five key issues in focus Geberit AG, 16 March 2006 4
Slide 5: 2005 in review: Important Facts
2005 in review Important Facts ! Reorganisation of sales activities in several markets ! Simplification of organisation in North America ! Development of group marketing ! Sale of Underground Piping Systems ! Remodeling of our factory in Aylesford, UK ! Close Chicago’s production facility ! Producti
Slide 6: Simplification of the management structure
2005 in review Simplification of the management structure ! Since 1.1.2005 new management structure ! New structure has proved itself CEO ! Simplification of the decision-making process Products Products Sales Sales Finance SAS RLS Europe N.A. + F.P. ! Clear distinction between global and local resp
Slide 7: Management structure
2005 in review Management structure CEO Albert M. Baehny Sales Products Finance Michael Reinhard Randolf Hanslin Roland Iff • Human • All European • Product- • Treasury Resources markets management • Controlling • Corporate • OEM • Production Communications • Internal Audit • Logistics • Marketing •
Slide 8: Management structure – personnel changes
2005 in review Management structure – personnel changes Personnel changes in the Group Executive No changes of management principles Board as per 24.4.2006 ! Result driven CEO Albert M. Baehny ! Contribution to the whole Sales Products Finance ! Focussed on the essential Michael Reinhard Randolf Han
Slide 9: Agenda
Investor presentation Agenda ! Overview A. M. Baehny ! Sales development A. M. Baehny ! Financial results R. Iff ! Summary A. M. Baehny Geberit AG, 16 March 2006 9
Slide 10: Sales development 2005: Organic sales goal reached
Sales development 2005 Organic sales goal reached In CHF Mio. + 0.8% + 89 1'923 +7 1'907 - 80 e a b d organic divestment c 2004 currency 2005 In local + 5.0% currencies Geberit AG, 16 March 2006 10
Slide 11: Continued strong organic growth
Sales development 2005 Continued strong organic growth Sales Variance to prior year CHF Mio. % CHF % curr.adj./org. Q1 481.5 -7.2% -2.8% Q2 492.0 1.2% 5.4% H1 973.5 -3.1% 1.1% Q3 513.4 6.8% 10.9% Q4 436.0 3.5% 7.5% H2 949.4 5.3% 9.3% 12M 1’922.9 0.8% 5.0% ! Weak first quarter and first half year res
Slide 12: Market growth in most regions exceeded
Sales development 2005 Market growth in most regions exceeded Variance to prior year Far East / Pacific 1% in CHF curr.adj./org. Middle East / Africa + 1.0% + 5.3% North America 1% Europe 6% - 8.4% - 7.0% North America Far East / + 30.4% + 42.4% Pacific Europe 92% Middle East / + 13.5% + 20.0% CHF 1
Slide 13: Regional organic sales growth
Sales development 2005 Regional organic sales growth QoQ QoQ sales sales growth growth rate rate (curr. (curr. adj./org.) adj./org.) Q1 77.4% 52.4% Q2 22.6% 10.0% 5.6% 5.4% -0.7% -3.5% -2.8% -6.2% Europe North Far East / MEA Total Europe North Far East / MEA Total America Pacific America Pacific Q3
Slide 14: Continued strong growth in nearly all European markets
Sales development 2005 Continued strong growth in nearly all European markets Sales Variance to prior year Market CHF Mio. % CHF % curr.adj./org Total Europe 1'761.0 1.0% 5.3% Germany 634.4 -1.6% -1.0% Italy 256.3 1.4% 3.3% Switzerland 227.2 8.1% 8.8% Austria 111.3 10.1% 10.1% United Kingdom 88.2 -1
Slide 15: Unsatisfactory development in North America
Sales development 2005 Unsatisfactory development in North America Sales Variance to prior year Region CHF Mio. % CHF % curr.adj./org. North America 109.2 -8.4% -7.0% ! Strong North American construction market ! Two main issues - Business performance - Overall business model ! Corrective actions in
Slide 16: Strong sales growth in Far East / Pacific
Sales development 2005 Strong sales growth in Far East / Pacific Sales Variance to prior year Region CHF Mio. % CHF % curr.adj./org. Far East / Pacific 26.6 30.4% 42.4% ! Strong dynamic in all markets ! Focus on Installation Systems, Building Drainage Systems and OEM ! Opening of eight new sales off
Slide 17: Convincing development in Middle East / Africa
Sales development 2005 Convincing development in Middle East / Africa Sales Variance to prior year Region CHF Mio. % CHF % curr.adj./org. Middle East / Africa 26.1 13.5% 20.0% ! Strong development in the Gulf Region ! Over 70% of sales in the Gulf Region ! Project dependent ! New management and new
Slide 18: Sales distribution by product lines
Sales development 2005 Sales distribution by product lines Total Variance to prior year Product lines CHF Mio. % CHF % curr.adj./org. TOTAL 1'922.9 0.8% 5.0% Sanitary Systems 1'056.6 4.1% 3.6% Piping Systems 866.3 -2.8% 6.9% Installation Systems 626.9 5.7% 5.0% Flushing Systems 200.2 2.8% 2.7% Publi
Slide 19: Agenda
Investor presentation Agenda ! Overview A. M. Baehny ! Sales development A. M. Baehny ! Financial results R. Iff ! Summary A. M. Baehny Geberit AG, 16 March 2006 19
Slide 20: Financial results 2005: Overview
Financial results 2005 Overview CHF Mio. 2005 % YoY ! Operational margins at previous year Sales 1'922.9 0.8% level EBITDA 455.9 0.6% Margin 23.7% ! EBIT and Net Income benefit from elimination of goodwill amortization EBIT 366.9 20.1% Margin 19.1% ! EPS adjusted clearly above previous year Net Inco
Slide 21: Operational margins at previous year level
Financial results 2005 Operational margins at previous year level CHF Mio. 2005 % 2004 % % YoY Sales 1'922.9 100.0 1'906.8 100.0 0.8% Sales deductions 282.7 14.7 253.4 13.3 11.6% Net sales 1'640.2 85.3 1'653.4 86.7 -0.8% Cost of materials 580.3 30.2 570.9 29.9 1.6% Personnel expenses 418.5 21.8 441.
Slide 22: EBIT Margin analysis
Financial results 2005 EBIT Margin analysis EBIT Margin EBIT Margin 2004 16.0% Sale of Blücher Group +0.2% Mapress Purchase Accounting +0.6% +0.8% EBIT Margin 2004 adjusted 16.8% Volume effects +0.2% Other uncovered fix cost -0.3% Increased customer bonuses -0.8% Price effects, net +0.3% -0.6% EBIT
Slide 23: Earnings per share clearly above previous year
Financial results 2005 Earnings per share clearly above previous year CHF Mio. 2005 % 2004 1) % %YoY Operating profit (EBIT) 366.9 19.1 305.5 16.0 20.1% Financial income and (expenses), net -17.2 -0.9 -30.0 -1.6 -42.7% Profit before income tax expenses 349.7 18.2 275.5 14.4 26.9% Income tax expenses
Slide 24: Free cash flow increased again
Financial results 2005 Free cash flow increased again CHF Mio. 2005 2004 %YoY EBITDA 455.9 453.4 0.6% Interest expenses, net -17.2 -30.0 Income tax expenses -89.7 -81.1 Changes in deferred tax accruals 0.1 -5.5 Changes in long-term provisions 20.7 16.1 Changes in other long-term assets -3.2 -1.2 Net
Slide 25: Solid balance sheet
Financial results 2005 Solid balance sheet CHF Mio. 31.12.2005 31.12.2004* Cash and cash equivalents 180.0 81.6 Net working capital 120.8 130.9 Property, plant and equipment 528.3 538.8 Goodwill and intangible assets 812.4 878.8 Total assets 1'946.6 1'937.1 Financial liabilities 393.4 535.3 Accrued
Slide 26: Suggested profit distribution of Geberit AG
Financial results 2005 Suggested profit distribution of Geberit AG TCHF 2005 2004 Net income 138'491 110'234 Profit brought forward 8'396 9'682 Available earnings for distribution 146'887 119'916 Proposed dividend (+13.6%) 104'000 1) 91'520 2) Transfer to free reserves 40'000 20'000 Balance to be ca
Slide 27: Historical group performance
Financial results 2005 Historical group performance CHF Mio. 2005 2004 2003 2002 2001 2000 CAGR % Sales 1'923 1'907 1'404 1'273 1'165 1'209 9.7% Operating Cashflow (EBITDA) 456 453 330 296 262 298 8.9% EBITDA Margin 23.7% 23.8% 23.5% 23.2% 22.5% 24.6% Free Cashflow 290 273 206 200 143 112 21.0% EPS
Slide 28: Agenda
Investor presentation Agenda ! Overview A. M. Baehny ! Sales development A. M. Baehny ! Financial results R. Iff ! Summary A. M. Baehny Geberit AG, 16 March 2006 28
Slide 29: Factors supporting Geberit's current success
Summary Factors supporting Geberit‘s current success ! Rather stable economic environment ! Focussed business model ! Cost base under control ! Strong performance on all key operational metrics ! Internal corporate stability ! Changing perception towards Germany Geberit AG, 16 March 2006 29
Slide 30: Focussed business model
Summary Focussed business model ! Unique and strong position In front of the wall Bathroom equipment ! Integrated Sanitary technology Sanitary fittings ! Focus on water systems in building ! Limited presence in ventilation-, gas- Behind the wall und industrial usage ! No more presence in Underground
Slide 31: Medium-term perspectives remain excellent
Summary Medium-term perspectives remain excellent ! Growth drivers remain intact - Ongoing high innovation rate - Successful moves into under-penetrated markets - Organic growth outperforming the markets ! Costs under control ! Strong brand ! Industry-leading margins to be maintained ! Strong Free C
Slide 32: Growth potential – historical evolution
Summary Growth potential – historical evolution Geberit AG, 16 March 2006 32
Slide 33: Market penetration of concealed cistern solution
Summary Growth potential - Market penetration of concealed cistern solution New installations New installations // renovations renovations with with concealed concealed cistern cistern solution solution >80% 50-80% <20% Geberit AG, 16 March 2006 33
Slide 34: Growth potential – general trends
Summary Growth potential – general trends ! Increasing importance of the design and individualisation of the bathrooms ! Address new customer segments - Not only plumbers, but also increasingly - Architects - Constructors - End customer ! Future performance improvements - Hydraulics, water technolog
Slide 35: Macro Outlook 2006
Summary Macro Outlook 2006 ! Very good start after two months ! Germany encouraging prospects for the renovation residential business ! Italy better than statistics ! Switzerland further robust growth ! Austria construction market expected to register a slight showdown ! United Kingdom robust reside
Slide 36: Macro Outlook 2006
Summary Macro Outlook 2006 ! Scandinavia strong upward trend ! Spain one of the strongest construction markets in Europe ! Eastern Europe growth expected to be very healthy ! North America rate of housing starts expected to have peaked in 2005, non residental expected to remain strong ! Far East / P
Slide 37: Growth combined with sustainable high margins
Summary The ability to generate growth in combination with sustainable high margins Historic Historic currency currency adj. adj. organic organic sales sales growth growth Historic Historic EBITDA EBITDA margin margin Average 5.2% Average 23.8% 9.6% 8.9% 25.5% 24.6% 6.4% 23.8% 23.7% 5.0% 23.5% 4.8%
Slide 38: 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