Geberit AG, the Swiss maker of toilets and bathroom piping, predicted a “challenging” year for European construction as governments reel in spending and lending. The shares fell the most in more than four months.
Chief Executive Officer Albert Baehny is eying a move into Latin America and ramping up production of the AquaClean product, which combines a toilet with a bidet, as he seeks to make good on a missed sales goal in 2012 caused by slow demand from Switzerland to Italy.
Full-year net income rose 2.2 percent to 392.3 million francs ($413 million), the Rapperswil-based company said in a statement today. That compared with an average estimate of 396 million euros in a Bloomberg survey of nine analysts. Sales grew 3.1 percent to 2.19 billion francs, matching the average estimate.
“Geberit is well positioned in a demanding market environment,” Christoph Ladner, an analyst at Kepler Capital Markets in Zurich, said in a note to clients. Ladner doesn’t expect the shares to rise much further because of the subdued market outlook. He has a hold rating on the stock.
The company’s shares fell as much as 2.3 percent, the biggest intraday decline since Oct. 30, and traded 2.2 percent lower at 226.8 francs as of 10:35 a.m. in Zurich.
Geberit will pay a dividend of 6.60 francs per share, in line with a Bloomberg forecast.
“In Europe, volumes in the construction industry are likely to contract overall in the wake of the saving measures introduced in the public sector largely influenced by a lower readiness to provide debt financing,” Geberit said in a statement. The company gets more than 90 percent of sales from Europe.
The Swiss company will focus on marketing new products, “organic growth initiatives” and its “very promising” shower toilet business, it said. Baehny reiterated a target of increasing AquaClean sales 20 percent per year at a news conference in Zurich today. He declined to reveal total AquaClean sales or its contribution to profit, saying he prefers to keep the information from competitors who are scaling up rival offers.
“We want to keep it under wraps for now,” he said. “We don’t want our competitors to know how big or how small the business is,” Baehny said, adding that profitability is still clearly less than Geberit’s average.
The AquaClean range combines a toilet with a bidet and can be customized to include warm-air drying.