Shares of Geberit, a Swiss bathroom-systems products maker, experienced a decline on Thursday following the announcement of lower second-quarter earnings that fell short of expectations.
At 0956 GMT, the shares were trading 4.4% lower at CHF447, after initially dropping 5.4% earlier in the session.
Factors Affecting Geberit’s Performance
Geberit attributed its disappointing results to several factors. Firstly, the company reported significantly lower volumes compared to the previous year. Additionally, the decline in Europe’s construction industry impacted its performance. Moreover, Geberit acknowledged considerable wage inflation.
Outlook for 2023
Geberit expects a mid-single-digit decline in sales for 2023, along with an earnings before interest, taxes, depreciation, and amortization margin of approximately 29%.
Analyst Opinions
Analyst Christian Arnold from Stifel commented that while Geberit is handling the downturn in its end markets effectively, the company missed organic growth expectations by a significant margin. Arnold believes that Geberit’s guidance will lead to downward revisions to consensus estimates.
According to analysts from Jefferies, the guided sales decline is lower than the anticipated 1.5% decrease. They suggest that this guidance implies relatively flat organic sales growth compared to the previous year in the second half of 2023.
Emrah Basic, an analyst from Baader Helvea, stated that Geberit’s sales guidance implies a decline of around 4% to 5% based on current estimates.
Second-Quarter Financial Results
In the second quarter, Geberit reported a net profit of 153.5 million Swiss francs ($174.4 million). This figure represents a decrease from CHF182 million reported during the same period last year. Sales also declined by 19% to CHF769.1 million.
