7. Group Executive Board: remuneration and share/option ownership in 2023

This section was audited by the external auditor.

7.1 Performance in 2023

In 2023, the Geberit Group’s net sales fell by 9.1% to CHF 3,084 million. This decrease was strongly influenced by negative currency effects of CHF 147 million as a result of the Swiss franc, which was significantly stronger compared to most other currencies. In local currencies, this resulted in a decline of 4.8%. Price increases of around 8% had a positive impact on the development. Volumes were significantly lower due to the declining building construction industry in Europe and the high prior-year level. Furthermore, the sanitary industry in some countries was negatively impacted by the shift in demand from sanitary to heating solutions.

In Swiss francs, all results were heavily impacted by the negative currency development. In total, operating cashflow (EBITDA) increased by 1.4% to CHF 921 million. After currency adjustments, this corresponded to an increase of 7.8%. The EBITDA margin increased significantly by 310 basis points to 29.9% compared to the same period in the previous year. Mainly due to a positive one-off tax effect in the previous year and a more negative financial result compared with the previous year, net income declined by 12.6% to CHF 617 million (currency-adjusted -6.3%), corresponding to a return on net sales of 20.0% (previous year 20.8%). Earnings per share fell by 10.2% to CHF 18.39 (previous year CHF 20.48). However, due to the positive effects of the share buyback programme, the decrease was less than proportional compared to the development of net income. Currency-adjusted, this resulted in a decrease of 3.7%. The return on invested capital (ROIC) decreased to 23.6% (previous year 26.5%), mainly due to the positive one-off tax effect in the previous year.

The variable remuneration (STI) of the Group Executive Board is determined on the basis of the following key performance indicators, which all have the same weighting: currency-adjusted net sales performance and EPS compared with the previous year, EBITDA margin and ROIC as well as reduction of the CO₂ emissions. The achievement varied by key performance indicator, whereas the weighted average of all key figures which is taken to calculate the variable remuneration was above target. The achievement of qualitative individual targets is also taken into consideration.

7.2 Remuneration awarded in 2023

The remuneration of the Group Executive Board amounted to TCHF 10,179 in 2023 (previous year TCHF 9,436). The remuneration of the CEO amounted to TCHF 3,161 in the same period (previous year TCHF 3,148). The total remuneration of the Group Executive Board was slightly higher in 2023 compared to the previous year. There were seven members in the Group Executive Board in 2023 who received compensation for the full year. This compares to seven members in 2022, of whom six served on a full year basis. The additional member of the Group Executive Board was appointed in November 2022 with the associated increase in the individual remuneration elements. The CEO’s variable remuneration represented 69.3% of his fixed remuneration. For the other members of the Group Executive Board, the variable remuneration represented between 64.3% and 69.3% (previous year: between 61.1% and 68.3%) of their individual fixed remuneration (plus representation allowance).

At the 2022 Annual General Meeting, the shareholders approved a maximum aggregate amount of TCHF 11,500 for the remuneration of the Group Executive Board for the year 2023. The remuneration awarded for that period amounts to TCHF 10,179 and is within the approved amount.

Further information on the remuneration awarded to the Group Executive Board for the business year 2023, compared with the maximum potential amount of remuneration, is provided with the invitation to the ordinary Annual General Meeting 2024.

The following table shows details of remuneration (gross) for 2023 and 2022:

The parameters taken into consideration in the option valuation model are set out in Consolidated Financial Statements Geberit Group, Note 17.

7.3 Shareholdings of the Group Executive Board

As of the end of 2023 and 2022, the members of the Group Executive Board held the following shares in the company:

As of 31 December 2023, and in compliance with the Articles of Incorporation of Geberit AG, there were no outstanding loans or credits between the company and the members of the Group Executive Board, closely related parties or former members of the Group Executive Board.