Swiss sanitary systems manufacturer Geberit reported a 2.8% increase in first-half net sales to 1.71 billion francs, as strong volumes and price increases offset currency headwinds. The company’s shares surged more than 7% on Wednesday after Jefferies upgraded its price target to 698 francs, implying roughly 32% upside from the prior close of 527 francs.
First-half operating cash flow (EBITDA) rose 3% to 529 million francs, though the EBITDA margin declined by approximately 80 basis points year-on-year to 30.9%. Net income increased 7.4% to 364 million francs, while earnings per share climbed 7.9% to 11.09 francs. Free cash flow, however, fell 12.1% to 217 million francs, and net debt rose to 1.33 billion francs from 1.17 billion francs.
Second-quarter net sales reached 838 million francs, roughly 4% above consensus estimates, with currency-adjusted growth of 8.8%. Growth was entirely volume-driven, as pricing adjustments were not fully implemented until June. Regionally, Eastern Europe led with 11.8% growth, followed by Switzerland at 9.7% and Italy at 6.9%. Western Europe declined 0.4%, weighed by weakness in France and the UK.
Geberit reaffirmed its full-year guidance, projecting currency-adjusted net sales growth of 5% to 6%, above the 4.4% consensus. The company also maintained its EBITDA margin guidance at around the prior-year level. Analysts noted management’s cautiously optimistic tone on European residential new build and renovation activity.
The company completed a 300-million-franc share buyback in early June and launched a new two-year program valued at up to 300 million francs. Jefferies maintained its Buy rating, citing the Q2 beat and limited investor interest in the sector.
