Christian Buhl , CEO Roland Iff, CFO Analyst conference Full year review 2016 14 March 2017
Agenda Agenda Review C. Buhl Sales development C. Buhl Financial Results R. Iff Sanitec integration C. Buhl Building industry outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl 2 14 March 2017
Review 2016 Excellent results in an improved market environment • Group net sales increased by 8.3% to CHF 2’809 million • In local currencies, net sales increased by 6.4% organically • Adjusted EBITDA increased by 14.6% • Adjusted EBITDA margin increased by 160 bp to 28.3% • Adjusted net income increased by 18.4%, adj. net income margin reached 20.8% • Adjusted earnings per share increased by 19.8% to CHF 15.85 • Free cashflow increased by 16.5%, reaching 20.1% of net sales 3 3 14 March 2017
Review 2016 Dividend increase of 19.0% • The Board of Directors proposes a dividend of CHF 10.00 per share, an increase of 19.0% vs. previous year • 757’000 shares bought back and cancelled as part of the program completed by February 2016 • New share buy-back program of CHF 450 million over a period of max. 3 years starting end of Q2 2017 • Sanitec integration on track – majority of synergies captured • Divestment of non-core businesses Koralle and Varicor finalized 4 14 March 2017
Review 2016 Investments – In line with the medium-term plan New products Capex , CHF million Modernization & rationalization 147 Capacity expansion 139 • 2016 capital expenditures 5.6% 16% below previous year 105 98 • Increased spend for 86 43% modernization & rationalization • Investments 2016 correspond to 5.0% of net sales 41% • All major projects implemented as planned 2012 2013 2014 2015 2016 5 14 March 2017
Review 2016 Investments – Expansion of logistics center in Pfullendorf • Expansion of logistics capacity – up to 250 trucks per day • New concept for long goods storage • Innovative technologies and further process innovations • Operation ramp-up as of March 2017 • Capex: EUR 40 million 6 14 March 2017
Review 2016 Innovation and marketing – Increased expenditure R&D 1 , in CHF million 72 63 56 50 51 • Increasing expenditure in innovation and marketing Marketing, in CHF million • R&D expenditure of 2.6% of net 105 98 87 sales in 2016 84 84 • Basis for future value creation 2012 2013 2014 2015 2016 1) Including capitalized R&D expenses 7 14 March 2017
Review 2016 Innovation – Successful product introductions in 2016 Ceramics Geberit urinal system Geberit Silent-Pro No need to remove for New highly sound-insulating plug- New ceramic and maintenance & service in drainage system complementary product range for the Nordics “Suits every need” “Stay calm” “Nordic style” 8 14 March 2017
Review 2016 (growth vs. 2015) Customer relations – Key activities, example Germany Annual market activities 2016 Customer • Wholesaler sales rep. 450 visits visits – Push 70’000 • Installer / Planer sales rep. customer 500 visits Customer visits • Showroom sales rep. visits – Pull 450 visits (+17%) • 39 Geberit BauTreff events with 9’200 customers • 131 Geberit on Tour events with 10’800 customers • 3 Geberit ArcDate events with 300 customers 26’000 • 26 fire protection events with 2’100 customers Events customers at • 5 Mapress Foren events with 70 customers events • 2 TrackDays events with 30 customers (+30%) • 3 AquaClean Mobil events with 3’500 contacts • 10 trade fairs and 540 trade fair participations • 620 trainings with 10’800 customers 11’700 customers Trainings • 10 webinars with 900 customers at trainings (+12%) 9 14 March 2017
Review 2016 Customer relations – First events of integrated sales organization “Geberit BauTreff ” • 39 "Geberit BauTreff" events with 9'200 customers in urban areas • New concept for customers along entire value chain • Presentation of new & combined product portfolio “Geberit on Tour” • 131 "Geberit on Tour" events with 10'800 customers in rural areas • Adapted mobile concept for installers & wholesalers • Focus on new products & system technology 10 14 March 2017
Review 2016 Employees – Decrease due to divestment and synergies Number of employees by Number of employees by business region processes 2016 2016 4% 8% 8% 2% 2% 28% 22% 24% Production Germany 62% Sales & Rest of Marketing Western Europe Administration Eastern Europe 40% R&D Asia / Africa Apprentices America • 11’592 employees per of 2016 • Decrease of 634 individuals, or 5.2% compared to the end of the previous year mainly due to Koralle divestment and integration synergies 11 14 March 2017
Review 2016 Sustainability – Improvement of our environmental footprint Environmental impact 2007-2016 • Environmental impact in relation to 249 net sales declined by 10.8% in 2016 239 100% • Energy consumption reduced by -49% 5.2% in 2016 • CO 2 emissions in relation to net sales reduced by 9.9% in 2016 2006 08 10 12 14 2016 • Environmental impact in relation to Environmental impact increase through net sales reduced by 49% in ten M&A, in UBP billion years Environmental impact organic, in UBP billion Environmental impact in relation to net sales currency-adjusted, in % (Index: 2006 = 100) The environmental impact is measured in impact points (UBP) according to the Swiss impact assessment method of ecological scarcity (version 2013) 12 14 March 2017
Review 2016 Social responsibility – Volunteer project with Geberit employees in Nepal • Geberit employees working together with local people in a community in Western Nepal • Supporting construction work of a water pipeline • Cooperation with Helvetas water projects in Nepal including financial funding 13 14 March 2017
Agenda Agenda Review C. Buhl Sales development C. Buhl Financial Results R. Iff Sanitec integration C. Buhl Building industry outlook C. Buhl Geberit outlook C. Buhl Summary C. Buhl 14 14 March 2017
Sales development 2016 Strong organic growth in local currencies Net sales, in CHF million Total variance: CHF +215 million (+8.3%) 2′809 +32 +18 +165 2′594 Net sales Organic growth Currency M&A net Net sales FY 2015 in local currency effect (Sanitec / Koralle) FY 2016 +6.4% +0.7% +1.2% 15 15 14 March 2017
Sales development 2016 Similar sales growth in first and second half of the year Net sales Variance to prior year Quarter CHF million % CHF % c.a., org. Q1 12.9% 3.1% 718.6 Q2 761.2 13.5% 10.2% H1 13.2% 6.7% 1'479.8 Q3 4.1% 6.0% 692.6 Q4 2.5% 6.3% 636.6 H2 1'329.2 3.3% 6.2% 12M 2'809.0 8.3% 6.4% Notes: Sanitec: Absolute net sales include 12 months Sanitec; c.a., org. growth rate only 11 months (Feb - Dec) Koralle: Absolute net sales include 6 months Koralle (H1 2016); c.a., org. growth rate only 5 months (Feb - Jun) 16 14 March 2017
Sales development 2016 Positive sales development in all regions Net sales in CHF million and organic growth 2016 by region in % (curr. adj.) Europe 2′570.1 +6.8% America Far East / Pacific 93.6 +0.2% 77.4 +4.3% Middle East / Africa 67.9 +3.5% Total +6.4% 17 14 March 2017
Sales development 2016 Sales growth in all European countries / regions (1/2) Variance to prior Net sales Country / year CHF Region million % CHF % c.a., org. • Limited market growth of around 2.5% Germany 861 7.9% 4.7% due to capacity constraints of installers • Strong market growth in Sweden Nordic 306 18.2% 11.1% • Good market growth in rest of region Region • Market growth in H2 2016 • Switzerland 281 1.9% 6.4% Positive one-time effect from Mera backlog elimination Central- / • Eastern 257 10.6% 10.4% Mixed picture of market environments Europe • Ongoing market recovery in Netherlands Benelux 219 11.8% 7.9% leading to bottlenecks at installers 18 14 March 2017
Sales development 2016 Sales growth in all European countries / regions (2/2) Variance to prior Net sales Country / year CHF Region million % CHF % c.a., org. • Only slightly growing construction Italy 186 7.7% 3.9% market in 2016 • Outperforming an improved building France 171 11.6% 4.8% construction sector • Unexpected strong market upswing Austria 147 13.5% 12.3% driven by realization of delayed projects • No impact from Brexit on sales in H2 UK / Ireland 123 -2.3% 5.4% 2016 • Iberian Ongoing market recovery in Spain driven 19 8.8% 6.5% Peninsula by renovation sector 19 14 March 2017
Sales development 2016 Sales growth in all international regions Variance to prior Net sales Country / year CHF Region million % CHF % c.a., org. • Slowdown of recovery in residential construction America 94 2.5% 0.2% • Stagnation of the institutional market sector • Stabilizing building construction sector Far East / in China in H2 2016 77 3.1% 4.3% Pacific • Growing construction market in India • Declining construction market in the Gulf Middle East / region in 2016 68 0.9% 3.5% Africa • Growing market in South Africa 20 14 March 2017
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