Plumbing supplier Geberit sees massive Q1 raw material price rises

The logo of shower toilet and sanitary ware manufacturer Geberit is seen at its headquarters in Rapperswil-Jona, Switzerland, October 30, 2018. REUTERS/Arnd Wiegmann

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ZURICH, May 4 (Reuters) – Geberit’s (GEBN.S) operating profit fell 5% in the first quarter as “massive” raw material price hikes and the stronger Swiss franc took their toll, the bathroom systems maker’s higher sales and Piping said on Wednesday.

Operating profit fell to 263 million Swiss francs ($268.5 million) in the three months ended March 31, the ceramic and shower-toilet maker said as costs of metals, plastics and other raw materials, transportation and energy costs rose.

Revenue increased to 980 million Swiss francs in the first quarter, an increase of 13% in local currencies. Measured in Swiss francs, the increase fell to 7.8%.

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“While the first quarter of 2022 saw extremely strong revenue growth, there were also negative currency effects as well as massive price increases for raw materials, energy and transportation, partially offset by sales price increases,” it said.

Raw materials are 24% more expensive than a year earlier, the Swiss company said, while energy costs nearly doubled.

Commodities are expected to rise again by around 10% in the second quarter compared to the first three months of the year, Geberit said, adding that this would lead to “large increases” in selling prices to compensate. The company already raised prices by 1.5% in January and 2.5% in April.

Geberit sees strong demand in the construction industry. The company, whose products are used in new construction and renovation projects, is considered representative of the health of the entire sector.

It is planning a new share buyback program of up to CHF 650 million over the next two years after the current program is completed. The new regulation would start in the third quarter at the latest.

($1 = 0.9796 Swiss Francs)

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Reporting by John Revill, editing by Michael Shields

Our standards: The Thomson Reuters Trust Principles.

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