Geberit Raises Profitability Outlook for 2023

Shares of Geberit, the Swiss sanitary-products maker, have experienced a notable increase following the company's upward revision of its profitability outlook for 2023. Geberit was able to mitigate declining volumes through strategic price increases.

Strong Performance Boosts Share Price

Currently, at 0854 GMT on Thursday, Geberit shares are trading 8.6% higher at CHF458.60.

Revised Earnings Expectations

Geberit now expects an earnings before interest, taxes, depreciation, and amortization (EBITDA) margin between 29% and 30% for the year, surpassing its previous projection of 29%. However, net sales are still predicted to decline by a mid-single digit percentage.

Third Quarter Results

The company reported a remarkable increase in EBITDA for the third quarter, amounting to 222.6 million Swiss francs ($245.2 million). This surge is compared to CHF206.0 million recorded in the same quarter last year. Furthermore, Geberit achieved a margin of 30.6% during this period, up from 26.1%.

On the other hand, quarterly net sales fell from CHF790.7 million to CHF727.9 million.

Factors Behind Increased Profitability

Geberit attributes its enhanced profitability over the first nine months of the year to a combination of factors such as price hikes of approximately 10%, decreased energy prices, and effective cost controls. These measures have proved successful despite challenges in the market and unfavorable currency movements.

Positive Outlook

According to Baader Helvea analyst Emrah Basic, while it is uncertain whether volumes have hit their lowest point, a significant deterioration beyond current levels seems unlikely. The analyst suggests that volumes could stabilize over the next two quarters.