Medium-term goals
Geberit has set itself the goal of establishing new standards for sanitary products, continually developing these standards and thereby gaining market shares. Among other things, this approach yields sales growth that outstrips the industry average. Basically, Geberit is aiming to achieve its sales targets while at the same time maintaining its industry leadership in terms of profitability and the ability to generate high cashflows.
The growth in net sales in local currencies, after adjustments for acquisitions, is expected to be between 4 and 6 percent in the medium term as an average over one economic cycle. This growth results from the weighted average growth of the sanitary market in the markets where Geberit is active of around 2 percent (corresponding to the growth of the gross domestic product (GDP)) and a market overperformance of around 3 percent. Additionally, an operating cashflow (EBITDA) margin of between 28 and 30 percent is expected to be achieved, and the ROIC is expected to be at an industry-leading level in the medium term. Furthermore, an average reduction in CO2 intensity of 5 percent per year was set as a further medium-term target as part of the CO2 strategy.
In order to cope with growth and to be prepared for upcoming major projects, greater investments are currently being made in property, plant and equipment – around CHF 200 million per year in the medium term.
Further growth through acquisitions has not been ruled out. However, any potential acquisition will have to satisfy strict strategic and financial criteria.
A net debt ratio of around 1.5x the operating cashflow is seen as adequate for our business.