Geberit Earnings Beat Estimates on Middle East DemandPatrick Winters
Geberit AG, the Swiss maker of toilets and bathroom piping, posted first-quarter earnings and sales that beat analyst estimates as growth in the Middle East and Africa made up for a decline in America and Asia.
Earnings before interest and taxes rose 6.2 percent to 137 million francs ($146 million) while sales gained 2.4 percent to 582.6 million francs, the company said in a statement today. The average estimate of analysts in a Bloomberg survey was for Ebit of 130 million francs and revenue of 577 million francs.
The results are a boost for Chief Executive Officer Albert Baehny after Geberit in March predicted a “challenging” year for European construction as governments reel in spending and lending. Sales in the Middle East and Africa gained 22.8 percent in the first quarter, compared with growth of 1.3 percent in Europe, a decline of 9.9 percent in the America region and a 8.4 percent drop in the Far East and Pacific area.
“The objective of the Geberit Group, not only in the construction markets that are still healthy but also in those that are shrinking, is to provide a convincing market performance and to continue to gain market shares as in previous years,” the company said today. “The convincing first-quarter results give Management cause to be confident that solid results will be achieved again in 2013.”
The stock gained as much as 1.8 percent in Zurich trading and was up 1.4 percent at 229.50 francs as of 9:10 a.m., giving the company a market value of 8.9 billion francs. Before today, the shares had risen 12 percent this year while the Bloomberg EMEA Building Materials Index gained 5 percent.
The company, which employs 6,200 people in 41 countries, said first-quarter earnings also benefited from lower material costs and from reduced marketing expenses.
Baehny is also eying a move into Latin America and is 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.