Investing.com — Geberit AG shares declined Thursday after the Swiss plumbing products company reported mixed earnings for 2024. Despite achieving a 2.5% currency-adjusted increase in net sales, the firm highlighted several challenges.
The company revealed that net sales in Swiss francs remained flat at CHF 3,085 million due to unfavorable currency developments.
The sales growth was driven by higher volumes, inventory rebuilding, and market position expansion, despite a strong decline in the European building construction industry.
Fourth-quarter net sales were CHF 685 million, a 1.3% decline year-over-year, though currency-adjusted figures showed a slight 0.7% increase.
Management expects the full-year 2024 EBITDA margin to be slightly below the previous year’s 29.9%, citing positive impacts from volume growth and lower direct material costs, offset by wage inflation and expenses related to growth initiatives and digitalization projects.
Investment bank analysts reacted to the results with caution. Morgan Stanley (NYSE:MS) noted the in-line sales figures but pointed out the challenging conditions in European markets. They highlighted that the company upgraded its EBITDA guidance slightly above their expectations, with optimism for the retrofit market in 2025.
Jefferies echoed this sentiment, recognizing a stronger-than-expected finish to the year but emphasizing that consensus already anticipated the margin guidance. They also pointed to the importance of confirming mild price inflation to support 2025 forecasts.
“While guidance for flattish market volumes in 2025 comes as little surprise, investors will now be seeking reassurance in mild inflation this year to reach consensus,” said the firm.
Geberit (SIX:GEBN) anticipates a stabilizing market in 2025, with stable to slightly positive developments in the renovation sector, which accounts for 60% of its business, while new build markets may see slight declines.