Geberit AG · SIX:GEBN
Geberit — FY2022 Earnings Presentation
57 slides from Geberit's earnings presentation, Mar 8, 2023
Slide 1: Analyst conference Full year results 2022
Analyst conference Full year results 2022 Christian Buhl, CEO Tobias Knechtle, CFO March 8, 2023
Slide 2: Agenda
Agenda Overview Sales development Financial results Building construction outlook Geberit outlook Summary SLIDE 2 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 3: Key figures 2022
Key figures 2022 Net sales (c.a.) EBITDA margin +4.8% 26.8% • Currency-adjusted top-line growth despite record high in 2021 vs. PY -410 bps vs. PY • EBITDA margin decline due to input cost inflation EPS (c.a.) Dividend proposal (CHF) • Currency-adjusted EPS growth +4.7% 12.60 • Increased dividend of
Slide 4: Net sales development 2022
Net sales development 2022 Comparison vs. PYQ and PY Q1 Q2 Q3 Q4 FY 13.0% • Strong sales and volume growth in H1 +4.2% Net sales 9.6% +13.5% − COVID-19 induced home improvement trend growth 4.8% − Stock build-up at wholesalers (c.a.) 1.6% • Decreasing volumes in H2 − De-stocking at wholesalers +9.6%
Slide 5: Unprecedented cost inflation in 2022
Unprecedented cost inflation in 2022 2021 2022 Geberit monthly price index (Jan 2021=100), currency adjusted Q1 Q2 Q3 Q4 140 130 Raw 120 material 110 • Full year raw material prices up by 19% vs. 2021 prices1 100 • Full year energy prices up by 101% vs. 2021 • Total impact of raw material and energy
Slide 6: Sales 2022 – Customer interactions
Sales 2022 – Customer interactions Customer contacts FlowFit on Tour (Germany) • 461’000 customer contacts • Above pre-COVID level (+6% vs. 2019) Customer trainings • 67’000 participants1 • Strong increase vs. pre-COVID (+81% vs. 2019) • Know-how transfer (installation, products, etc.) Customer even
Slide 7: Marketing 2022 – Selected activities
Marketing 2022 – Selected activities Digital tools B2B – Over 20 applications for professionals • Plumber app with onsite support (Pro App): 750’000 sessions • Further roll-out of installation calculator (GIS / Duofix calculator) in 4 countries • “Plug-in for Autodesk” BIM software with 8’000 active
Slide 8: Marketing 2022 – Marketing expenses
Marketing 2022 – Marketing expenses Digital Others % of net sales Marketing expenses CHF million 118 112 110 95 99 • Marketing spend below 2021 mainly driven 27 by currency development and efficiency gains • 27% of total marketing spend for digital 72 tools and digital channels 2018 2019 2020 2021 2
Slide 9: Innovations 2022 – New product introductions
Innovations 2022 – New product introductions Alpha 8cm – new Geberit FlowFit concealed cistern India Geberit ONE AquaClean Cama New supply piping Flexible, slim cistern for local Extension of washplace Self-installable shower system with a new building situation in India assortment with >2’000 toile
Slide 10: Innovation 2022 – Continuous investments in innovation pipeline
Innovation 2022 – Continuous investments in innovation pipeline R&D expenditure CHF million 78 78 77 75 78 72 • Overall stable R&D expenditure • Slightly lower R&D spend 2022 due to 2017 2018 2019 2020 2021 2022 FlowFit development in previous years R&D performance • Number of patents on high level
Slide 11: CAPEX 2022
CAPEX 2022 New products CAPEX Modernisation & rationalisation CHF million Capacity expansion -8% % of net sales 167 169 162 155 150 9% • 2022 CAPEX slightly below prior year mainly due to currency development 53% • Mainly for modernization and capacity expansion 38% 2018 2019 2020 2021 2022 5.3% 5.4
Slide 12: CAPEX 2022 – Selected examples
CAPEX 2022 – Selected examples Capacity expansion flush valves, Pfullendorf (DE) • New automated assembly line for new Flush valve Typ212 • CAPEX: EUR 1.8 million (2021 - 2024) • Payback: 0.6 years Capacity increase for wall-hung toilets, Ekenäs (FI) • New fully automated high pressure casting produ
Slide 13: Operations in 2022 – Continuous productivity improvements in plants
Operations in 2022 – Continuous productivity improvements in plants Production volume1 and productivity2, indexed (2014 = 100) • Productivity improvement of +2.1% in Volume1 Productivity2 2022 despite 130 132 117 118 122 − unprecedent volatility 108 112 114 100 − overall volume decline • Average pro
Slide 14: Employees 2022 – Slight decrease of number of employees
Employees 2022 – Slight decrease of number of employees Number of employees, in FTE Total variance: -295 FTEs (-2.5%) 11’809 -348 42 0 6 5 11’514 End 2021 Operations Sales R&D G&A Apprentices End 2022 • Operational flexibility: Reduction in Operations due to volume decline • Strategic stability: − B
Slide 15: Sustainability 2022 – Relative environmental impact reduced by -21%
Sustainability 2022 – Relative environmental impact reduced by -21% in 2022 Environmental impact 2015-2022 in UBP1 billion 402 • Relative environmental impact2 2022: -21% 377 363 341 332 • Absolute environmental impact 2022: -17% 291 300 248 • Relative environmental impact2 since 2015: -57% -57% • M
Slide 16: Sustainability 2022 – Relative CO2 emissions reduced by -22%
Sustainability 2022 – Relative CO2 emissions reduced by -22% in 2022 CO2 emissions1 (Scope 1&2) 2015-2022 in thousand tonnes • New CO2 strategy implemented in 2022 242 • Relative2 CO2 emissions 2022: -22% 226 222 208 204 179 184 • Absolute CO2 emissions 2022: -18% 151 -56% • Relative2 CO2 emissions
Slide 17: Sustainability 2022
Sustainability 2022 External acknowledgement of sustainability leadership • EcoVadis: 3rd consecutive platinum rating (2020, 2021, 2022) – Geberit among top 1% • 6th stakeholder panel conducted • Very positive feedback from leading sustainability experts on new CO2 strategy Example: Energy saving wi
Slide 18: Social responsibility 2022
Social responsibility 2022 Products and services Inclusion CHF million • Conscious awarding of contracts to workshops for people with disabilities in the 9 10 10 amount of CHF 10 million, creating ~185 full-time inclusive workplaces 8 8 • Direct employment of ~230 FTEs with disabilities within the g
Slide 19: Agenda
Agenda Overview Sales development Financial results Building construction outlook Geberit outlook Summary SLIDE 19 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 20: FY 2022 – Net sales growth in local currencies of +4.8%
FY 2022 – Net sales growth in local currencies of +4.8% Net sales, CHF million Total: CHF -69 million (-2.0%) +165 -234 3’460 3’392 Net sales Growth in local currency Currency Net sales FY2021 effect FY2022 +4.8% -6.8% SLIDE 20 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 21: Europe – Mature markets
Net sales 2022 – Development in European mature markets Country / Net sales Variance to PY Comment Region CHF million % CHF % c.a. • Record high results in previous year Germany 1’017 -6.3% 0.8% • De-stocking of wholesalers; shift from sanitary to heating Europe – Mature markets • Lower price increa
Slide 22: Europe – Expansion markets
Net sales 2022 – Development in European expansion markets Country / Net sales Variance to PY Comment Region CHF million % CHF % c.a. Eastern • Stop of sales activities in Russia as of end of March 2022 322 -8.1% 6.5% Europe • 10% of sales in the region lost due to war in Ukraine Europe – Expansion
Slide 23: Net sales 2022 – Development outside Europe
Net sales 2022 – Development outside Europe Net sales Variance to PY Country / Region Comment CHF million % CHF % c.a. • Strong growth in India and Southeast Asia Far East / Pacific 130 6.0% 6.5% • Slight sales decline in China due to lockdowns in Q2 America 107 7.3% 2.8% • Strong first three quarte
Slide 24: Net sales 2022 – Development by product areas
Net sales 2022 – Development by product areas Net sales Variance to PY Comment CHF million % CHF % c.a. Installation & Flushing Systems 1’258 -5.0% 2.0% • Strongest negative effect from wholesaler destocking • Strongest price increases Piping Systems 1’095 3.8% 10.8% • Solid project business • New F
Slide 25: Agenda
Agenda Overview Sales development Financial results Building construction outlook Geberit outlook Summary SLIDE 25 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 26: Key figures 2022
Key figures 2022 CHF million 2022 2021 %YoY c.a. • Strong negative currency effect Net sales 3’392 3’460 -2.0% +4.8% • Decline of operational profitability due to EBITDA 909 1’069 -15.0% -8.0% − Strong increase of raw material & energy prices Margin 26.8% 30.9% EBIT 755 902 -16.3% -8.8% − Delayed ef
Slide 27: Income statement 2022
Income statement 2022 CHF million 2022 % 2021 % % YoY Net sales 3’392 100.0% 3’460 100.0% -2.0% Cost of materials 1’075 31.7% 997 28.8% 7.8% Personnel expenses 776 22.9% 812 23.5% -4.4% Depreciation 128 3.8% 134 3.9% -4.3% Amortisation of intangibles 25 0.7% 34 1.0% -24.9% Other operating expenses,
Slide 28: EBITDA margin 2022 – Sales price increase compensating raw material inflation
EBITDA margin 2022 – Sales price increase compensating raw material inflation 30.9% -3.1% -1.4% +0.7% -1.5% Energy prices -1.6% Other 26.8% -0.3% EBITDA Volume and Price effects, Other cost Currency effect EBITDA margin FY 2021 product mix effect net1 effects margin FY 2022 • Record high margin leve
Slide 29: EBITDA margin Q4 2022 – Sales price increases compensating cost inflation
EBITDA margin Q4 2022 – Sales price increases compensating cost inflation 22.7% 21.3% -0.2% -0.6% -6.5% +5.9% thereof energy -0.6% EBITDA Volume and Price effects, Other cost Currency effect EBITDA margin Q4 2021 product mix effect net1 effects margin Q4 2022 • Negative volume effect driven by whole
Slide 30: Net income and EPS 2022
Net income and EPS 2022 – Lesser decline of net income than operating profit CHF million 2022 % 2021 % % YoY Operating profit (EBIT) 755 22.3% 902 26.1% -16.3% Financial result, net -14 -0.4% -13 -0.4% 6.0% Profit before income tax expenses 741 21.8% 888 25.7% -16.6% Income tax expenses 35 1.0% 133
Slide 31: Free cashflow 2022 – Decrease driven by EBITDA, NWC, and FX
Free cashflow 2022 – Decrease driven by EBITDA, NWC1, and FX CHF million 2022 2021 % YoY EBITDA 909 1’069 -15.0% Changes in NWC1 from operating core activities -66 21 Changes in the other positions of the NWC1 -17 7 Changes in provisions 10 21 • Decrease of FCF by -31% Income taxes paid -119 -134 Ot
Slide 32: Balance sheet 2022
Balance sheet 2022 CHF million 31.12.2022 31.12.2021 Cash and cash equivalents 206 511 Net working capital 237 157 Property, plant and equipment 948 956 Deferred tax assets 150 89 Other non-current assets and non-current financial • Very solid balance sheet 40 94 assets − Equity ratio 43.7% Goodwill
Slide 33: Share buyback programs – New program with accelerated start
Share buyback programs – New program with accelerated start Avg. price / # ’000 share Total Share buyback program 2020-2022 Jan 1 – Jun 16 • Volume: CHF 500 million 482 CHF 587 CHF 283 million 2022 • Shares: 826’000 • Duration: Sept 17, 2020 to June 16, 2022 Share buyback program 2022-2024 • Maximum
Slide 34: Dividend 2022 – Proposed increase to CHF 12.60
Dividend Ex 2022 – Proposed increase to CHF 12.60 Distribution per share, CHF +52% • Increase of dividend by CHF 0.10 12.50 12.60* 11.30 11.40 (+0.8%) 10.00 10.40 10.80 8.30 8.40 • Continuous increase of distribution per share • Increase of +52% of distribution per share vs. 2014 2014 2015 2016 2017
Slide 35: Free cashflow and distribution to shareholders
FCF margin Free cashflow and distribution to shareholders Payout ratio Free cashflow, CHF million 3’313 717 809 582 644 562 • Ø FCF margin 20.7% (2018-2022, in % of net sales) 2018 2019 2020 2021 2022 Total 18.9% 20.9% 24.0% 23.4% 16.6% 20.7% Distribution to shareholders, CHF million Share buyback D
Slide 36: Agenda
Agenda Overview Sales development Financial results Building construction outlook Geberit outlook Summary SLIDE 36 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 37: Building construction outlook 2023
Building construction outlook 2023 Overall • Challenging environment due ongoing geopolitical and macroeconomic risks and uncertainties • Fundamental demand for renovation and new housing in several European countries Positive • Structural trend towards higher sanitary standards • Positive market en
Slide 38: Agenda
Agenda Overview Sales development Financial results Building construction outlook Geberit outlook Summary SLIDE 38 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 39: Geberit Outlook 2023
Geberit Outlook 2023 • Gain market shares regardless of prevailing market environment Objective • Execute growth initiatives including new product introductions • Manage volume uncertainties without harming mid-term business potential Two guiding principles defined for 2023 Guiding • Strategic stabi
Slide 40: New products 2023 (1/4) – New Acanto WC
New products 2023 (1/4) – New Acanto WC • 2nd generation of asymmetrical toilet flush (“Turbo Flush 2.0”) • B2C benefits − 10x better flushing performance vs. norm − Quiet flushing − Very easy to clean (no dirt traps) • B2B benefit: 40% faster installation • Mid-level price segment SLIDE 40 ANALYST
Slide 41: New products 2023 (1/4) – New Acanto WC
New products 2023 (1/4) – New Acanto WC <Video> SLIDE 41 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 42: New products 2023 (1/4) – New Acanto WC
New products 2023 (1/4) – New Acanto WC <Video> SLIDE 42 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 43: New products 2023 (2/4)
New products 2023 (2/4) Monolith Plus • New lighting concept, aligned with Geberit ONE mirrors • Better user experience (smooth actuation, control via app) • Integrated interval flushing for absences, e.g., for holiday homes Type 208 flush valve • New flush valve for slim cisterns (8cm) • Water savi
Slide 44: New products 2023 (3/4)
New products 2023 (3/4) New actuator plate Sigma70 • Minimalistic floating design • Architectural colours & materials New shower channel CleanLine50 • Especially slim design for the middle segment • Available in 2 most popular colours, stainless steel and black chrome • Full compatibility to existin
Slide 45: New products 2023 (4/4)
New products 2023 (4/4) Further new matt design color options for • Geberit ONE washplace • Geberit iCon series • Geberit washbasin taps Brenta / Piave • Geberit AquaClean Sela • Geberit wall shower drain CO2 label for ceramics • 100% compensation of CO2-emissions through myclimate certificate • Int
Slide 46: Further priorities 2023
Further priorities 2023 Recent product introductions • New supply piping system FlowFit: Further roll-out in UK & FR • Concealed WC flushing cistern Alpha: Further penetration outside Europe Full WC system • Focus on full WC system: Concealed flushing cistern and wall-hung ceramic • Further penetrat
Slide 47: Investments 2023 – Installation & Flushing Systems
Investments 2023 – Installation & Flushing Systems Plant and capacity expansion, Lichtenstein (DE) • Expansion of plant for installation frames and pre-fab installation systems • Additional, fully automated production line • CAPEX: EUR 56 million (2021 - 2024) • Payback: 3.3 years Plant and capacity
Slide 48: Investments 2023 – Piping Systems
Investments 2023 – Piping Systems Capacity expansion FlowFit, Jona (CH) • Additional injection molding machines and assembly lines • Increase of capacity for FlowFit by 80% • CAPEX: CHF 8 million (2022 - 2023) • Payback: 4 years Modernization Mapress production, Langenfeld (DE) • New machinery and e
Slide 49: Investments 2023 – Bathroom Systems
Investments 2023 – Bathroom Systems New tunnel kiln, Carregado (PT) • Energy efficient tunnel kiln replacing 3 old kilns • Improved Energy consumption, saving of ~3’500 tonnes CO2 per year • CAPEX: CHF 8 million (2023 - 2024) • Payback: 4.6 years Flexible fuel system, Haldensleben (DE) • Securing bu
Slide 50: Investments 2023 – Customer training center in Germany
Investments 2023 – Customer training center in Germany New customer training center, Pfullendorf (DE) • New building, expanded capacities to train customers (approx. 5’000 sqm) • Modern training center allowing state-of-the-art training formats and exhibitions • CAPEX: CHF 33 million (2021 - 2024) S
Slide 51: Outlook – Raw material and energy prices
Outlook – Raw material and energy prices 2022 2023E Geberit: Monthly raw material prices1 Geberit: Monthly energy prices2 Currency adjusted, Index: Jan 2021=100 Currency adjusted, Index: Jan 2021=100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 140 450 400 135 350 130 300 250 125 200 120 150 Jan Feb Mar Apr May Jun Jul
Slide 52: Agenda
Agenda Overview Sales development Financial results Building construction outlook Geberit outlook Summary SLIDE 52 ANALYST CONFERENCE - FY 2022 MARCH 8, 2023
Slide 53: Summary – 2022
Summary – 2022 • Good results in a very challenging year • Unprecedent inflation leading to − strong sales price increases − unprecedent volume volatility due to stocking effects in distribution channel − temporary margin pressure • Further improved productivity despite challenging volumes • Success
Slide 54: Summary – Outlook 2023
Summary – Outlook 2023 • Challenging market environment • Raw material and energy prices remain on high level – at least for Q1 2023 • Significantly increased wage inflation • Priorities for Geberit in 2023 − Gain further market shares, e.g. with new product introductions − Strategic stability − Ope
Slide 55: Summary – Strong fundamentals delivering industry leading long-term results
Summary – Strong fundamentals delivering industry leading long-term results Net sales (c.a./org.) EPS (c.a.) Relative CO2 emissions • Fundamental need for our products +5.2% +10.9% -11.2% • Proven strategy and resilient business CAGR 2015 - 2022 CAGR 2015 - 2022 CAGR 2015 - 2022 model • Innovation a
Slide 56: Important dates in 2023
Important dates in 2023 • April 19, 2023 • Annual general meeting • April 25, 2023 • Dividend payment • May 2, 2023 • Interim report first quarter 2023 • Media release and conference call • August 17, 2023 • Information on the half-year results 2023 • Media release and conference call • November 2,
Slide 57: 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