H1 2015 Results
Agenda Agenda H1 2015 at a glance Building industry outlook 2015 Outlook 2015 2
Stable operating margins Group net sales increase of 20.1% to CHF 1 308 million In local currencies, net sales increased by 2.5% organically, i.e., excluding Sanitec Sanitec s H1 2015 net sales decreased by -1.5% in local currencies vs. H1 2014 Adjusted EBITDA increased by 5.5%, reaching an adj. EBITDA margin of 28.5% Adjusted EBIT increased by 3.2%, reaching an adj. EBIT margin of 24.9% Adjusted net income decreased by -1.2%, adj. net income margin reached 20.6% Adjusted earnings per share decreased by -0.7% to CHF 7.20 Acquisition and integration related cost of CHF 58 million on EBIT level 3
Changes in reporting 2015 vs. 2014 Sales reporting changed from sales to net sales (revenue from sales) Ceramics and Complementary Products added as a new product area H1 2015 consolidated results include 6 months of former Geberit and 5 months of Sanitec Sales reporting shows the following growth details: Total growth (including 5 months of Sanitec) Organic/currency adjusted growth (excluding Sanitec and with exchange rates as in 2014) Financial results published and commented adjusted for costs and charges related to the Sanitec acquisition and integration 4
Substantial negative currency effects Total variance: + CHF 219 million (+ 20.1%) 1 308 1 089 +27-113 +305 Net sales H1 2014 Organic growth in local currency Currency effect Sanitec (Feb. to Jun.) Net sales H1 2015 + 2.5% - 10.4% + 28.0% 5
Positive sales development in all regions Net sales growth by region in % (currency adjusted / organic) Total 2.5% Europe 1.4% America 11.2% Far East / Pacific 9.2% Middle East / Africa 25.2% Note: Figures from Sanitec not included in organic development 6
European net sales substantially impacted by Swiss currency rebate Region Net sales Variance to prior year CHF million % CHF % c.a. / org. Total Europe 1'190.1 19.5% 1.4% Germany 412.9 5.6% 3.2% Switzerland 141.7-0.9% -8.3% Nordic Region 122.5 155.7% 7.9% Central- / Eastern Europe 114.4 50.9% 4.0% Benelux 98.9 11.0% 3.8% Italy 88.7 1.1% -1.5% France 78.4 55.8% -1.1% Austria 63.1-6.8% 1.9% UK / Ireland 61.4 73.9% 9.5% Iberian Peninsula 8.1-2.7% 4.4% Note: Sanitec net sales included as of February (excluded in organic development) 7
Sanitary and piping systems with positive sales growth Product lines Net sales Variance to prior year CHF million % CHF % c.a. / org. TOTAL 1'307.5 20.1% 2.5% Sanitary Systems 598.9-6.0% 4.1% Installation Systems 385.1-7.4% 4.4% Cisterns and Mechanisms 114.7-6.6% 2.7% Faucets and Flushing Systems 57.9 6.3% 6.8% Waste Fittings and Traps 41.2-6.9% 1.2% Piping Systems 404.0-10.5% 0.3% Supply Systems 258.5-13.1% -1.5% Building Drainage Systems 145.5-5.4% 3.7% Ceramics and Complementary Products 304.6 na na Bathroom Ceramics 224.8 na na Ceramics Complentary Products 79.8 na na Note: Sanitec net sales included as of February (excluded in organic development) 8
H1 2015 margin dilution driven by consolidation of Sanitec CHF million H1 2015 H1 2014 % YoY Net sales 1'307.5 1'088.9 20.1% Operating profits significantly negatively impacted by strengthened Swiss Franc Margin dilution due to consolidation of Sanitec business Stable operating margins for the original Geberit business Improved operating margins for Sanitec standalone business Adj. EBITDA 373.2 353.9 5.5% Margin in % of net sales 28.5% 32.5% EBITDA 329.3 353.9-7.0% Adj. EBIT 325.6 315.6 3.2% Margin in % of net sales 24.9% 29.0% EBIT 267.8 315.6-15.1% Adj. net income 269.5 272.7-1.2% Margin in % of net sales 20.6% 25.0% Net income 218.5 272.7-19.9% Adj. EPS (CHF) 7.20 7.25-0.7% EPS (CHF) 5.84 7.25-19.4% Free cashflow 146.6 174.5-16.0% Margin in % of net sales 11.2% 16.0% 9
Q2 2015 margin dilution driven by consolidation of Sanitec CHF million Q2 2015 Q2 2014 % YoY Net sales 670.9 535.0 25.4% Adj. EBITDA 188.3 171.8 9.6% Margin in % of net sales 28.1% 32.1% Sanitec acquisition overcompensating negative currency impact EBITDA 155.2 171.8-9.7% Adj. EBIT 163.0 152.4 7.0% Margin in % of net sales 24.3% 28.5% EBIT 116.0 152.4-23.9% Adj. net income 134.4 130.8 2.8% Margin in % of net sales 20.0% 24.4% Net income 97.9 130.8-25.2% Adj. EPS (CHF) 3.60 3.48 3.4% EPS (CHF) 2.62 3.48-24.7% 10
EBITDA margin analysis 32.5% +0.4% +0.3% 32.3% -0.7% -0.2% -3.8% 28.5% -3.3% 25.2% EBITDA margin H1 2014 Volume and product mix effect Other cost effects Price effects, net Currency effect Adj./org. EBITDA margin H1 2015 Sanitec (as of Feb.) Adj. EBITDA margin H1 2015 Acqui. and integration costs of Sanitec EBITDA margin H1 2015 Positive volume and product mix effect Higher personnel expenses Positive net impact of purchase and sales prices despite 10% currency rebate in Switzerland as of February Margin dilution due to consolidation of Sanitec as of February Adjustments for acquisition and integration related costs of Sanitec of CHF 44 million 11
Acquisition and integration related costs of Sanitec Acquisition and integration related costs Transaction costs Integration costs Inventory revaluation charge* Total cost on EBITDA level Amortization charges for intangibles* Total cost on EBIT level Financing costs Tax benefits Total cost on net income level H1 2015 CHF million 7 9 28 44 14 58 6-13 51 FY 2015 estimate CHF million 7 15 to 20 28 30 6-18 to -20 * Related to purchase price allocation 12
Raw materials price development 150 140 130 120 110 100 90 80 70 60 50 40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 Polystyrene Polyethylene Aluminum Copper Nickel Index: December 2010 = 100 13
Agenda Agenda H1 2015 at a glance Building industry outlook 2015 Outlook 2015 14
Building industry outlook 2015 Europe No overall recovery expected Overall, no recovery of European markets expected Positive and resilient markets in Germany, UK and Poland Switzerland at high volume with price pressure due to strengthened CHF Cautious outlook for Austria Moderate improvement in the Netherlands No significant recovery in Belgium, Nordics, Spain and Portugal Weak and declining markets in France and Italy Mixed picture in Central-/Eastern Europe substantial decline in Russia and Ukraine 15
Building industry outlook 2015 North America No recovery at relevant scale in US institutional sector Recovery in residential construction No significant recovery of institutional sector Solid growth of commercial sector 16
Building industry outlook 2015 Asia / Pacific Significant downward trend of residential sector in China Further decreasing of residential sector in China India generally positive Mixed picture in North & South East Asia Moderate growth in Australia 17
Building industry outlook 2015 Middle East / Africa Gulf region and South Africa as growth drivers Continued positive trend in the Gulf region Good prospects in South Africa Continued political uncertainty in Northern Africa and Near East 18
Agenda Agenda H1 2015 at a glance Building industry outlook 2015 Outlook 2015 19
Outlook 2015 Outlook Geberit 2015 The general picture for the building industry remains mixed and challenging with overall construction volume contraction in Europe Organic group net sales growth in local currencies of 2-3% Net sales of Sanitec on previous year s level Adjusted EBITDA-margin for the whole year around 26% 20
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 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 unaudited and is prepared under the same recognition and measurement principles applied for the audited annual financial statements for the year ended December 31, 2014. 21