Geberit pessimistic about still depressed construction sector

The Swiss-based company - which makes showers, toilets, bathroom sinks and pipes - saw its turnover erode by 1,4% to 1,638 billion Swiss francs (1,72 billion euros at current exchange rates) in the first six months of the year.

"Demand and corresponding sales volumes in end markets continued to decline," it said in a statement, also citing negative currency effects.

Net profit fell by 5% to 350 million Swiss francs over the period, with the group also suffering from a "significantly higher" tax rate, mainly due to the implementation from 2024 of the minimum tax advocated by the OECD.

To combat the tax race to the bottom, nearly 140 states committed at the end of 2021 to introducing a minimum corporate tax of 15% on multinationals.

For the year as a whole, Geberit is not very optimistic. "Due to the difficult conditions, the construction sector is likely to decline as a whole in 2024," the group notes.

He notes that demand has been depressed in Europe for two years - particularly in new construction - due to cost inflation and high interest rates.

"For the whole of 2024, management expects net sales in local currencies at the level of the previous year and an EBITDA margin of around 29%". The latter will therefore be down compared to the first half of the year alone (31,6%), but Geberit stresses that the indicator is always weaker in the second half of the year "due to seasonal factors".

"Despite the challenging market environment, the objective for 2024 remains to further strengthen the company's market position," she concludes.