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MarketScreener Homepage  >  Equities  >  Swiss Exchange  >  Geberit AG    GEBN   CH0030170408

GEBERIT AG

(GEBN)
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Geberit : Presentation on the annual results 2019

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03/10/2020 | 04:12pm EDT

Analyst conference

Full year results 2019

Christian Buhl, CEO

Roland Iff, CFO

March 10, 2020

Agenda

Overview

C. Buhl

Sales development

C. Buhl

Financial results

R. Iff

Building construction outlook

C. Buhl

Geberit outlook

C. Buhl

Summary

C. Buhl

SLIDE 2

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Key figures 2019

Net sales growth

Net sales growth

(in CHF)

(in local currencies)

+0.1%

+3.4%

Earnings per share

Free cashflow growth

growth1 (in CHF)

(in CHF)

+4.4%

+10.7%

1 Compared to adjusted previous year's figure

EBITDA margin

Net income growth1

(in CHF)

29.3%

+3.3%

+110 bps vs PY

Dividend proposal 2019

IFRS 16 effect

(in CHF)

11.30

EBITDA margin

+60 bps

+4.6% vs PY

SLIDE 3

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales & marketing 2019 - Continuous investment in customer relations

Push

Wholesalers

Installers / Planners

Showrooms / Architects / DIY / General contractors / Investors

End consumers

"Technical" Pull

"Showroom" Pull

consumer" Pull

"End

Market activities 2019 - Example Germany

  • Customer Visits
    • "Push": 7'100
    • "Technical Pull": 53'500
    • "Showroom Pull": 7'400
  • 334 events with 21'100 customers
  • 495 in-house trainings with 9'400 customers
  • Customer service: 274'000 calls, emails and chats

Geberit sales force

SLIDE 4

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales & marketing 2019 - Example of customer events in Germany

"Geberit NeuheitenTreff" ("Technical" Pull)

  • 49 events in urban areas with 12'800 customers
  • 285 events in rural areas (Geberit on Tour) with 8'300 customers
  • Networking platform for investors, architects, planners, wholesalers and installers with focus on rebranding and new products

"Geberit @ Vitra" ("Showroom" Pull)

  • 5 exclusive VIP events with 100 top key decision makers and journalists including Geberit AquaClean WC-lounge
  • Focus on Geberit ONE (first integrated product series), rebranding and design competence (Design Meets Function)

SLIDE 5

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Marketing 2019 - Expenditure

Marketing expenditure

CHF million

108

112

118

105

98

26

Digital

Others

% of net sales

• Continuous investments in customer relations and brand reputation

• Extraordinary cost of CHF 10 million for replacement of Keramag brand

• CHF 26 million or 22% of total marketing spend for digital tools and digital channels

2015

2016

2017

2018

2019

3.8%

3.7%

3.7%

3.6%

3.8%

SLIDE 6

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Marketing 2019 - Examples of digital activities for professionals

Geberit Pro app

  • Mobile app for on-site installation support
  • Relaunch with upgraded functionalities, additional content, and new look and feel
  • New functionality: Automated product identification based on artificial intelligence

SuperTube dimensioning tool

  • Web-basedcalculation tool to plan and dimension SuperTube drainage system
  • Rolled out in international markets

Building Information Modelling (BIM)

  • Product data for Geberit assortment behind the wall available in BIM format
  • Plug-infor Autodesk BIM software ensuring up-to-date BIM data via real-time connection to Geberit product information system

SLIDE 7

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Marketing 2019 - 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

• Launched in DE, CH, AT

Integrated website with B2C section

  • Enriched Geberit website with inspirational B2C content
  • Digital tools (inspiration tool, 3D planner) to support pull to end-consumers
  • Rolled out in DE, CH, AT

B2C CRM system

  • Cloud-basedtool for systematic management of end-consumer leads
  • Rolled out in DE, CH, AT, UK

SLIDE 8

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Innovation 2019 - Continuous strengthening of innovation pipeline

R&D expenditure

CHF million

63

72

78

78

77

Pre Sanitec integration Post Sanitec integration

% of net sales

  • Continuously high investments in innovation pipeline

2.4%

2.6%

2.7%

2.5%

2.5%

R&D performance

# new patents

46

24

32

32

29

  • R&D expenditure of 2.5% of net sales in 2019
  • Number of patents remains on high level after peak in 2018 driven by combined innovations behind and in front of the wall

2015

2016

2017

2018

2019

SLIDE 9

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Innovations 2019 - New product introductions

Geberit ONE

DuoFresh module

New bathroom series

Odour extraction and

combining knowhow

hygienic flushing water

behind and in front of the

for WC

wall

"The best of both

"For freshness in the

worlds"

bathroom"

AquaClean Sela

New mid-level shower toilet with focus on design and hygiene

"The design shower

toilet for every

bathroom"

SuperTube

Flow optimised drainage fittings to ensure a continuous air column in stacks

"The space gaining

system"

SLIDE 10

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

CAPEX 2019

CAPEX

CHF million

+3.1%

159

162

167

147

16%

139

44%

40%

2015

2016

2017

2018

2019

5.7%

5.0%

5.5%

5.3%

5.4%

New products

Modernisation & rationalisation

Capacity expansion % of net sales

  • 2019 capital expenditures +3.1% above prior year
  • Increased spend for modernisation & rationalisation as part of continuous improvement program
  • Stable investment rate of ~5.5% of net sales since 2015

SLIDE 11

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Investments 2019 - Examples capacity expansion & efficiency increase

Capacity expansion & efficiency increase of factory in Lichtenstein (DE)

  • Capacity expansion of second fully automated feet assembly unit for installation frame
  • Further automation
  • CAPEX: EUR 1.4 million (2019)
  • Payback of 3.4 years

Capacity expansion & efficiency increase of factory in Jona (CH)

  • Additional automated packing line for actuator plates with improved efficiency
  • Further automation
  • Doubling of capacity
  • CAPEX: EUR 1.7 millions (2019)

SLIDE 12

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Continuous productivity improvements - Metal and plastics plants

Production volume1 and productivity2, indexed (2014 = 100)

Volume1 Productivity2

115

121

126

112

108

100

100

2014

2015

2016

2017

2018

2019

  • Productivity improvement of +4.7% in 2019
  • Average productivity gain of +5.2% p.a. since 2014
  • Key drivers
    • Process improvements
    • Automation

1 Industrial minutes

2 Industrial minutes per working hour

SLIDE 13

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Employees 2019 - Stable number of employees

Number of employees, in FTE

Total variance: -11 FTEs (-0.1%)

11'630

11'619

17

-83

-4

59

End 2018

Production

SG&A

R&D

Apprentices

End 2019

  • Slight reduction of production employees due to efficiency improvements
  • Increase in Sales & Marketing driven by growth and digital initiatives
  • Increase of apprentices in order to increase the pool of qualified professionals for the future

SLIDE 14

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sustainability 2019 - Relative environmental impact reduced by -28% since Sanitec integration

Environmental impact 2015-2019, in UBP1 million

Sanitec

249 239 230 220 212

-28%

2015

2016

2017

2018

2019

Environmental impact in relation to net sales (c.a.) in % (index: 2015 = 100)

  • Relative environmental impact 2019: -6.9%
  • Absolute energy consumption 2019: -3.5%
  • Relative environmental impact since Sanitec integration in 2015: -28%

1 The environmental impact is measured in impact points (UBP) according to the Swiss impact assessment method of ecological scarcity (version 2013)

SLIDE 15

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sustainability 2019 - Relative CO2 emissions reduced by -26% since Sanitec integration

CO2-emissions2015-2019, in thousand tonnes

Sanitec

258 250 243 231 223

-26%

• Absolute CO2 emissions 2019: -3.8%

• CO2 emissions since 2015: -35'000 tonnes

• CO2 emissions in relation to net sales since Sanitec Integration in 2015: -26%

2015

2016

2017

2018

2019

CO2-emissions in relation to net sales (c.a.) in % (index: 2015 = 100)

SLIDE 16

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Example of sustainability projects

Energy saving and CO2 reduction in ceramic plants

  • Tunnel kilns responsible for large part of energy consumption
  • Modification of kilns with newest burner technology resulting in >20% energy savings per kiln with a payback of 3 years
  • Reduction of 27.5 GWh combustibles and 6'500 tons of CO2 p.a.

Intelligent use of waste heat

  • Using existing waste heat to pre-heat plastic granulates for injection molding processes
  • Annual saving of 0.4 GWh electricity in production plant in Pfullendorf (DE)
  • Corresponds to the average electricity consumption of 65 households p.a.

SLIDE 17

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Social responsibility 2019

Support of disabled and long-term unemployed

  • Sourcing of services and products from workshops for disabled and long-term unemployed
  • Assembly and packaging work totalling around CHF 8 million

Social project with Geberit apprentices in Cambodia

  • Renovation of the sanitary facilities in two schools in Siam Reap province
  • Geberit apprentices from Germany, Austria and Switzerland working on site

Volunteer project in Nepal

  • 16 Geberit employees from Nordic countries working together with local people to build a water supply system in a village in Western Nepal
  • Co-operationwith Swiss NGO Helvetas

SLIDE 18

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Agenda

Review

C. Buhl

Sales development

C. Buhl

Financial results

R. Iff

Building construction outlook

C. Buhl

Geberit outlook

C. Buhl

Summary

C. Buhl

SLIDE 19

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

FY 2019 - Net sales growth in local currency of +3.4%

CHF million

Total: CHF +2 million (+0.1%)

+104-102

3′081

3′083

Net sales

Growth in local currency

Currency

Net sales

FY2018

effect

FY2019

+ 3.4%

- 3.3%

SLIDE 20

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Net sales 2019 - Quarterly growth rates

Quarter

Net sales

Variance to prior year

CHF million

% CHF

% c.a.

Q1

830

0.9%

3.6%

Q2

797

-1.3%

2.6%

H1

1'627

-0.2%

3.1%

Q3

754

1.8%

5.5%

Q4

702

-1.1%

1.9%

H2

1'456

0.4%

3.7%

Full year

3'083

0.1%

3.4%

Comment

  • Quarterly volatility driven by
    • # of working days
    • Base effects and one-time effects
  • Fundamental growth relatively stable

SLIDE 21

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales 2019 - Net sales growth in all regions

Share of net sales and currency adjusted growth 2019 by region, %

America

(3% of net sales)

+0.5%

Europe (91% of net sales)

+3.4%

Middle East / Africa

(3% of netsales)

+1.3%

Total +3.4%

Far East / Pacific

(3% of net sales)

+9.0%

SLIDE 22

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales 2019 - Development in European countries / regions (1/2)

Country / Region

Net sales

Variance to PY

CHF million

% CHF

% c.a.

Germany

928

-0.6%

3.2%

Comment

  • Limited growth due to bottleneck of qualified installers
  • Above market growth driven by upselling strategy and new product introductions

Eastern Europe

305

-0.8%

2.9%

Mixed market environment

• Strong growth in Installation & Flushing Systems

• Growth in all countries

Nordic Region

303

-2.7%

2.6%

Strong growth in Installation- & Flushing and Piping

Systems

• Market running on high level

Switzerland

294

3.9%

3.9%

Strong market outperformance driven by all product

areas

Benelux

261

3.5%

7.4%

Positive market environment

Strong market outperformance in Netherlands and

Belgium

SLIDE 23

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales 2019 - Development in European countries / regions (2/2)

Country / Region

Italy

France

Austria

UK/Ireland

Iberian Peninsula

Net sales

Variance to PY

CHF million

% CHF

% c.a.

211

-2.5%

1.3%

180

-4.0%

-0.4%

173

1.3%

5.2%

114

2.3%

5.3%

25

1.1%

4.9%

Comment

  • Slow market due to weak economy
  • Sales decline in Bathroom Systems due to phase out of local ceramics brand as of 2020
  • Stagnating market
  • Strong growth in Installation & Flushing Systems
  • Exit of low margin ceramics business
  • Positive construction market with slight growth
  • Market outperformance in all product areas
  • Declining market due to weak non-residential sector
  • Market outperformance driven by strong growth in Piping Systems
  • Ongoing market recovery
  • Sales growth in Spain and Portugal

SLIDE 24

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales 2019 - Development in international regions

Country / Region

Far East / Pacific

Net sales

Variance to PY

Comment

CHF million

% CHF

% c.a.

• Mixed market environment across the region, moderate

106

6.5%

9.0%

increase in China and India but declining in Australia

• Double digit sales growth in China

America

Middle East / Africa

102

2.1%

0.5%

82 -2.1% 1.3%

  • Weaker than expected institutional market sector
  • Strong growth with electronic faucets
  • Challenging market environment across the region
  • Strong growth in Southern Africa and sales decline in the Gulf region

SLIDE 25

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Sales 2019 - Development by product areas

Net sales

Variance to PY

CHF million

% CHF

% c.a.

Installation &

1'145

1.1%

4.5%

Flushing Systems

Piping Systems

949

2.2%

5.8%

Bathroom

989

-3.0%

0.0%

Systems

Comment

  • Strong growth with "Behind-the-wall"- flushing systems
  • Strong growth in Supply Piping and Drainage Piping Systems
  • Weak market environment in the Nordics
  • Phase out of selected local brands
  • Exit of low margin ceramics business in France

SLIDE 26

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Agenda

Review

C. Buhl

Sales development

C. Buhl

Financial results

R. Iff

Building construction outlook

C. Buhl

Geberit outlook

C. Buhl

Summary

C. Buhl

SLIDE 27

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Key figures 2019

CHF million

2019

2018

% YoY

Net sales

3'083

3'081

0.1%

EBITDA

904

868

4.2%

Margin

29.3%

28.2%

Adj. EBIT

757

744

1.7%

Margin

24.5%

24.2%

EBIT

757

708

6.9%

Adj. net income

647

626

3.3%

Margin

21.0%

20.3%

Net income

647

597

8.3%

Adj. EPS (CHF)

17.97

17.21

4.4%

EPS (CHF)

17.97

16.40

9.6%

Free cashflow

644

582

10.7%

Margin

20.9%

18.9%

  • Improved operational profitability despite significant tariff increases due to
    • Sales price increases
    • Volume growth and improved product mix
    • Lower raw material prices
    • Efficiency and improvement projects
    • Cost discipline
  • Very strong free cashflow growth
  • YoY growth negatively impacted by currency translation effect
  • Positive impact on EBITDA margin due to new IFRS 16 standard (+60 bps)

SLIDE 28

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Income statement 2019

CHF million

2019

%

2018

%

% YoY

Net sales

3'083

100.0%

3'081

100.0%

0.1%

Cost of materials

860

27.9%

893

29.0%

-3.7%

Personnel expenses

752

24.4%

744

24.2%

1.1%

Depreciation

127

4.1%

105

3.4%

21.3%

Amortisation of intangibles

20

0.6%

55

1.8%

-63.9%

Other operating expenses, net

567

18.4%

576

18.7%

-1.5%

Total operating expenses, net

2'326

75.5%

2'373

77.0%

-2.0%

Operating profit (EBIT)

757

24.5%

708

23.0%

6.9%

EBITDA

904

29.3%

868

28.2%

4.2%

Adj. operating profit (adj. EBIT)

757

24.5%

744

24.2%

1.7%

SLIDE 29

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

EBITDA margin 2019 - Profitability on high level

+1.4%

-1.6%

29.3%

+0.6%

+0.8%

28.2%

-0.1%

EBITDA

Volume and

Price effects,

Other cost

Currency effect

IFRS 16

EBITDA

margin FY 2018 product mix effect

net

effects

margin FY 2019

  • Positive impact from volume and product mix effect
  • Positive net price effect due to price increases and lower raw material prices
  • Negative other cost effects driven by strong tariff increases and higher marketing expenses
  • Neglectable currency effect on margins due to natural hedge
  • Positive IFRS 16 impact on EBITDA margin

SLIDE 30

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Net income and EPS 2019 - Above prior year's adjusted levels

CHF million

2019

%

2018

%

% YoY

Operating profit (EBIT)

757

24.5%

708

23.0%

6.9%

Financial result, net

-14

-0.4%

-20

-0.7%

32.4%

Profit before income tax expenses

743

24.1%

687

22.3%

8.1%

Income tax expenses

96

3.1%

90

2.9%

6.6%

in % pre-tax profit

12.9%

13.1%

Net income

647

21.0%

597

19.4%

8.3%

EPS (CHF)

17.97

16.40

9.6%

Adj. net income

647

21.0%

626

20.3%

3.3%

Adj. EPS (CHF)

17.97

17.21

4.4%

SLIDE 31

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Free cashflow 2019 - Strong increase of free cashflow

CHF million

2019

2018

% YoY

EBITDA

904

868

4.2%

Changes in net working capital from operating core activities

1

-19

Changes in the other positions of the net working capital

11

8

Changes in provisions

-4

-12

Income taxes paid

-89

-103

Other non-cash income and expenses

11

5

Net cash from operating activities

834

748

11.6%

in % net sales

27.1%

24.3%

Purchase of PP&E and intangible assets, net

-164

-154

Repayments of lease liabilities

-16

Interest and other financing cost paid, net

-10

-12

Free cashflow

644

582

10.7%

in % net sales

20.9%

18.9%

SLIDE 32

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Balance sheet 2019

CHF million

31.12.2019

31.12.2018

Cash and short-term investments

428

282

Net working capital

202

206

Property, plant and equipment

920

829

Deferred tax assets

125

92

Other non-current assets and non-current financial assets

38

37

Goodwill and intangible assets

1'597

1'652

Total assets

3'725

3'502

Debt

837

837

Accrued pension obligations

331

292

Tax liabilities

186

172

Other non-current provisions and nun-current liabilities

57

53

Equity

1'899

1'745

Equity ratio

51.0%

49.8%

Net debt

409

555

Net debt / EBITDA

0.5

0.6

ROIC

23.1%

22.6%

SLIDE 33

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Dividend Ex 2019 - Proposed increase of +4.6%

CHF thousand

2019

2018

Net income Geberit AG

549'800

480'166

Balance brought forward

10'211

2'563

Total available earnings

560'011

482'729

Transfer to free reserves

150'000

80'000

Proposed / paid dividend

409'9291

393'518

2

Balance to be carried forward

82'359

10'211

Total appropriation of available earnings

560'011

482'729

  • The Board of Directors proposes to the Geberit AG annual general meeting on April 1, 2020 a dividend of CHF 11.30 per share with dividend right. This corresponds to a payout ratio

of 63.4%. The actual amount of shares with dividend rights may change prior to the annual general meeting.

  • Dividend of CHF 10.80 per share

SLIDE 34

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Balance Sheet Policy supports shareholder friendly distribution policy

Balance Sheet

Policy

Share Buy Back

Maintain debt financing on current level

  • Accept a net debt / EBITDA ratio of max. 1.0x
  • Refinance bonds as they become due
  • Use revolving credit facility more intensively to deal with volatility of working capital and cash levels
  • Reduce cash balance to a minimum to avoid negative interest payments

New Share buy back program under preparation

  • Maximum volume: CHF 500 million
  • Execution period: 2 years
  • Start: End of Q2 or Q3 2020

SLIDE 35

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Free cashflow and distribution to shareholders

Free cashflow, CHF million

2'743

484

557

476

582

644

Average FCF margin 2015- 2019 in % of net sales: 18.9%

2015

2016

2017

2018

2019

Total

18.7%

19.8%

16.4%

18.9%

20.9%

18.9%

Distribution to shareholders, CHF million

Share buyback Dividend payments

2'293

535

471

360

460

566

436

1'758

Average distribution to shareholders 2015-2019 in % of free cashflow: 84%

2015

2016

2017

2018

2019

Total

97%

65%

97%

97%

68%

84%

SLIDE 36

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Agenda

Review

C. Buhl

Sales development

C. Buhl

Financial results

R. Iff

Building construction outlook

C. Buhl

Geberit outlook

C. Buhl

Summary

C. Buhl

SLIDE 37

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Building industry outlook

• Increased geopolitical risks creating more uncertaintiesand volatility in the global economy

• Impact of Corona Viruson global economy difficult to assess

• Market outlook difficult and unsecure - especiallyfor highinfection regions like China or Italy

• Our market outlook is based on followingassumptions

 Corona Virus with no long lasting impact on broadereconomy

  • Building construction industry more resilient compared to other sectors

SLIDE 38

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Construction market Europe - Decreasing residential building permits

Number of residential building permits in Europe

  • vs PY period
    13.3%

9.1%

2.3%

-1.2%

2016 2017 2018 9M2019

  • 2019 - first decreasing building permits since 2013
  • Further slowdown of new residential segment
  • Robust renovation segment partially compensating weaker new build

Source: Eurostat, European Union - 28 countries

SLIDE 39

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Building industry outlook - Europe

Mixed construction market environment

  • Confident about demand in Germany - limited qualified installation capacity remains a bottleneck
  • Switzerland with a slightly declining market
  • Nordic Region at best stagnation - modest growth in Denmarkand Norway, decline inSweden and Finland
  • Mixed picture in Eastern Europe with a positivemarket in Poland, stagnationin Russiaand challenging inTurkey

• Positive environment in Benelux - solid growth in Belgium and a flattish marketinNetherlands

• Italy - unpredictable due to Corona Virus uncertainties

• Stagnation in France due to a declining residential new built segment

• Positive construction market with slight growth in Austria

• Stabilisation in the United Kingdom

• Ongoing recovery on Iberian Peninsula but at a lower pace than in previous years

SLIDE 40

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Building industry outlook - Rather stable despite increased geopolitical risks

Europe

Slowdown of residential new built

North America

Middle East / Africa

Asia Pacific

Slightly declining institutional

Weak environment in Gulf and

Mixed picture across the region,

and commercial sector

difficult in South Africa

no predictability in China due to

Corona Virus

SLIDE 41

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Agenda

Review

C. Buhl

Sales development

C. Buhl

Financial results

R. Iff

Building construction outlook

C. Buhl

Geberit outlook

C. Buhl

Summary

C. Buhl

SLIDE 42

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Product introductions 2020 - Bathroom Systems

Geberit ONE extension:

  • New bidet with height adjustment
  • Easy to clean; no overflow hole and KeraTect surface coating
  • Easy installation with bayonet gear

Modernized Renova:

  • Design update for one of the most successful bathroom series
  • Modern widely accepted design with long-lasting life cycle
  • "The proven standard" in sanitary ware for architects and planners in an updated look

SLIDE 43

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Product introductions 2020 - Installation & Flushing and Bathroom Systems

New actuator plates:

  • More flexibility in colours and materials
  • Anti fingerprint effect
  • Full compatibility and retrofittable until 2002

CleanLine80:

  • New upper market shower channel solution
  • Highly elegant look
  • Also available in metallic trend colours

SLIDE 44

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Product introductions 2020 - Piping Systems

Pipe scraper:

  • Pipe scraper for faster welding process for drainage pipes
  • Time saving: 10s / scrape
  • Easy handling; use with cordless drill
  • For all pipes & fittings of Geberit PE & Silent-db20

Pluvia fastening system:

  • Additional support of Pluvia fastening system in situations with high suspension of fastening rail from ceiling
  • Increased safety and stability of the Geberit Pluvia system
  • Easy system for safe installation

SLIDE 45

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Investments 2020 - Capacity expansion & efficiency increase

Capacity expansion & efficiency increase of factory in Villadose (I)

  • Additional extrusion line for Silent-PP pipes with automated short pipes packaging system
  • CAPEX: EUR 4.4 million (2019 and 2020)
  • Payback of 4.0 years

Renewal of stainless steel production lines in Langenfeld (DE)

  • Renewal of machinery / tools and efficiency improvement
  • Start of production as of 2021
  • CAPEX: EUR 10 million (2020/21)

SLIDE 46

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Investments 2020 - Productivity & efficiency increase in ceramics plants

Productivity and efficiency increase with lean and high automated Line in Slavuta (UA)

  • New machines, HP casting, robots, drying chamber, glazing unit and intralogistics
  • CAPEX: CHF 3 million (2020-2021)

Technology change and high automation in Kolo (PL)

  • New machines, HP casting, robots, drying chamber, glazing unit and intralogistics
  • CAPEX: CHF 5 million (2020-2021)

Volume increase and new mould making centre in Ekenäs (FIN)

  • New machines, HP casting, robots, drying chamber, glazing unit and intralogistics
  • New mould making department for HPC
  • CAPEX: CHF 5.5 million (2020-2021)

SLIDE 47

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Marketing outlook 2020 - Brand portfolio simplification

20192020

20202020

  • Phase-outof 3 ceramic brands (Sphinx, Allia, Pozzi-Ginori) and replacement with Geberit brand in 2020
  • Key benefits
    • Improved customer support
    • Simplified cross- and upselling
    • Reduced complexity in operations and logistics
    • More capacity for development of new products
  • One-timemarketing cost of CHF 10 million each in 2019 and 2020

SLIDE 48

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Digitalisation outlook 2020 - Further investments in key areas

Additional Digitalisation efforts 2020

  • Strengthening of dedicated team for digital products incl. infrastructure build-up

• Increased yearly spending of CHF 15

• Extension of capacity for product datamillion as of 2020 creation and customization

• Mainly personnel cost and OPEX

  • Additional IT capacity mainly for sales & marketing and product management

SLIDE 49

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Outlook 2020 - Impact of Corona Virus on Geberit

  • No material impact on Geberit business so far
    • 2 weeks production stop in two Chinese plants - running at full capacity again as of mid of March
    • Temporary production stop of shower toilet "Mera" - re-start and ramp-up as of mid of March
    • All other production sites and supply chain currently running at normal level
  • Several health measures in line with local health authorities and additional business contingency measures implemented
  • Outlook
    • Q1 2020: Currently, negative sales impact from production stop in China and Mera expected (< CHF 10 million)
    • FY 2020: Currently, no material impact on business expected

SLIDE 50

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Agenda

Review

C. Buhl

Sales development

C. Buhl

Financial results

R. Iff

Building industry outlook

C. Buhl

Geberit outlook

C. Buhl

Summary

C. Buhl

SLIDE 51

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Summary - Geberit with a very good year 2019

  • Convincing net sales growth in local currencies
  • Strong bottom-line results
  • Further improved profitability despite strong wage inflation and extra-ordinary marketing costs
  • Various efficiency projects, high cost discipline and pricing power
  • Important new products introduced in all product areas
  • Continued significant investments in operational assets and digitalisation
  • Strong, double digit growth of free cashflow to new record level

SLIDE 52

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Summary - Outlook 2020

  • Corona Virus make a market outlook difficult and unsecure
  • However, building construction industry expected to be more resilient compared to other sectors
  • Significant wage inflation from labour tariffs increases - similar as in 2019
  • Short-term,decreasing raw material prices in Q1 2020 expected (versus Q4 2019)
  • Key priorities for Geberit 2020
    • Simplification of brand portfolio by replacing three further ceramics brands by Geberit
    • Further strengthening of digitalisation efforts with dedicated initiatives
    • Focus on various efficiency projects and strict cost discipline to mitigate wage inflation

SLIDE 53

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Summary - Strong fundamentals delivering industry leading results

  • Focused strategy with execution capabilities
  • Decision maker oriented business model
  • Innovation & sustainability focus
  • Efficiency focus with continuous investments
  • Functional and lean organisation
  • Strong, down-to-earth company culture

Net sales growth

EBITDA margin

CO2 emissions

(c.a./org)

(relative to net sales)

+4.1%

28.5%

-26%

CAGR 2016-19

Avg. 2016-19*

2016-19

ROIC

Free cashflow margin

Patents (#)

22.4%

19.0%

139

Avg. 2016-19*

Avg. 2016-19

Total 2016-19

* adjusted figures for 2016-2018

SLIDE 54

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Important dates in 2020

April 1, 2020

Annual general meeting

April 7, 2020

Dividend payment

April 30, 2020

• Interim report first quarter 2020

• Media release and conference call

August 18, 2020

• Information on the half-year results 2020

• Media release and conference call

October 29, 2020

• Interim report third quarter 2020

• Media release and conference call

SLIDE 55

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Appendix - Historical sales vs. net sales

Sales growth (c.a./org)

14.4%

9.6%

8.9%

11.4%

9.5%

• Reporting on sales till

6.4%

6.4%

2014 before switching to

3.0%

4.8%

5.0%

3.2%

5.0%

4.5% 3.6%

3.5%

net sales reporting

-1.0%

-6.5%

Net sales growth (c.a./org)

13.4%1

9.4%1

9.3%1

11.5%1

8.9%

6.1%

1

5.9%

6.4%

3.8%1

4.8%1

3.4%

4.9%

4.2%

3.5% 3.1% 3.4%

3.3%

1

3.1%

2.7%

4.7%

4.1%

-1.5%1

-6.8%

1999

00

01

02

03

04

05

06

07

08

09

10

11

12

13

14

2015

2016

17

18

2019

1 Figures are calculated assuming a fixed currency and M&A effect for the years 1999 to 2007 and a reallocation of transport costs for net sales figures before 2006

SLIDE 56

ANALYST CONFERENCE - FY 2019

MARCH 10, 2020

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 in this presentation relating to matters that are not historical facts are forward-looking statements that are not guarantees of future performance and involve risks and uncertainties, including but not limited to: future global economic conditions, foreign exchange rates, regulatory rules, market conditions, the actions of competitors and other factors beyond the control of the company.

All financial information included is audited except quarterly sales, analyses to impact of currencies, non-organic impact, one- off adjustments as well as the development of the EBITDA margin. Quarterly figures are prepared under the same recognition and measurement principles applied for the audited annual financial statements.

SLIDE 57

ANALYST CONFERENCE - FY 2019 MARCH 10, 2020

Disclaimer

Geberit AG published this content on 10 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 March 2020 21:11:34 UTC

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NameTitle
Christian Buhl Chief Executive Officer
Albert M. Baehny Non-Executive Chairman
Martin Ziegler Head-Operations
Roland Iff Chief Financial Officer
Felix Klaiber Head-Technology & Innovation