Procurement

Supply chains somewhat eased

The Corporate Purchasing department is responsible worldwide for procuring raw materials, semi-finished and finished products, commercial products, and services. Besides minimising risks of downtime as well as costs, the primary purpose of comprehensive supplier management is to safeguard supplies.

The global and regional supply chains returned to normal in the reporting year. There was good availability of raw materials and components, and the delivery times were much shorter than in the previous year. Forwarders on land and sea were faced with increasing overcapacities due to the significant decline in global demand. Additionally, inventories in supply chains worldwide were reduced due to increased interest rates, among other reasons.

The situation with raw material prices eased somewhat in 2023. Following a further slight increase in the first quarter, prices fell continuously during the rest of the year – although still at a high level from a historic perspective (+24% in local currencies compared to the start of 2021). Compared to the previous year, the impact of price changes for raw materials on the income statement was -2.6% in local currencies or CHF -25 million.

Following the sharp rise in the previous year, energy prices fell in the first half of 2023 before stabilising at a level that remains high when viewed on a long-term basis (+56% compared to the start of 2021). Compared to the previous year, the price decrease in local currencies was -25.9% or CHF -26 million.

Compliance with Code of Conduct for Suppliers checked

All of Geberit’s business partners and suppliers are obligated to comply with comprehensive standards. This applies to quality, socially responsible and healthy working conditions, human rights as well as environmental protection and the commitment to fair business practices. The basis for the cooperation is the Code of Conduct for Suppliers. Last revised in 2016, this Code is aligned with the principles of the United Nations Global Compact and is available in 15 languages. As of the end of the reporting year, more than 90% of suppliers as measured in terms of purchasing volumes had signed the Code.

Corporate Purchasing and Sustainability jointly ensure that the standards found in the Code of Conduct are upheld by conducting regular EHS (Environment, Health and Safety) audits. The number of audits made and their content are selected with the help of a risk matrix. The goal of these audits is to check compliance with the Code of Conduct and local legal requirements regarding environmental aspects, occupational health and safety and social responsibility – including human rights – on site. The audits are carried out by an independent service provider. Appropriate measures are initiated where required. During the reporting year, five external EHS audits (previous year: four EHS audits) were carried out at suppliers in the area of procurement.

Supplier Integrity Line

Introduced in 2017, the Supplier Integrity Line from Geberit allows suppliers to anonymously report any violations of the guidelines set out in the Code of Conduct for Suppliers by Geberit employees or by competitors. The hotline is free of charge for users and is operated by an independent service company in a total of eleven languages. Violations can also be reported online via an external website. No violations of the guidelines set out in the Code of Conduct for Suppliers were reported in 2023 (previous year: no violations reported).

New due diligence obligations according to the Swiss Code of Obligations (CO Art. 964a ff.)

Risk management in procurement also forms the basis for checking adherence to the new due diligence obligations described in the Swiss Code of Obligations, which are aimed at preventing child labour and the use of conflict materials. As Geberit neither directly imports nor processes conflict minerals (tin, tantalum, tungsten, gold) in the EU or Switzerland, it is not deemed to be an “importer” within the meaning of EU Regulation 2017/821 or Art. 964a ff. of the Swiss Code of Obligations. Furthermore, there were no suspicions of cases of child labour in the supply chain. For further information, see chapter on procurement in SPR.