The sanitary technology specialist Geberit suffered in the first half of the year from the Covid-19 pandemic, but also from negative currency effects. Profitability and net profit contracted sharply. Uncertainty remains for the second half of the year.
Net profit fell 14% to 315 million francs, Geberit said on Tuesday. In terms of profitability, gross operating income (EBITDA) was 462 million, down 7.8%, and profit before interest and taxes (EBIT) fell 10.5% to 386 millions.
Despite a general deterioration in these indicators, the figures published by Geberit are better than expected. The AWP consensus expected a net profit of 310 million francs, an Ebitda of 446 million and an Ebit of 377 million.
Another positive point, the gross operating margin (EBITDA) swelled by 70 basis points to 31.5%. This improvement is explained by a rapid implementation of measures intended to fight against the coronavirus, tariff adjustments, the low level of raw material prices and the hedging against currency fluctuations, lists the press release.
During the first six months of the year, investments amounted to 55 million francs, or 3.7% of total sales, injected mainly into infrastructure. The share of turnover allocated to investments was 3.2% between January and June 2019.
Difficult 2020 forecasts
Research and development expenses remained more or less stable at 38 million, which represents 2.6% of revenues (2.4% in the first half of 2019).
Geberit had already lifted the veil on its half-yearly sales at the beginning of July. These fell 9.8% to 1.47 billion francs. The adjusted change for currency effects was -4.5%.
Management believes that it remains difficult to provide forecasts for fiscal 2020 as a whole. Standardization is expected in the building sector in the second half of the year, despite a still difficult situation in non-residential real estate projects.
For the second half of the year, the group expects a slightly lower turnover adjusted for currency effects compared to the year-over-year. For 2020, the Ebitda margin should wane somewhat.
/ ATS
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