Geberit Quarterly Sales Gain on Northern European Recovery

Geberit AG, a Swiss maker of toilets and bathroom piping, reported third-quarter earnings that beat analyst estimates helped by a recovery in northern European markets. The shares rose the most in two years.

Earnings before interest, taxes, amortization and depreciation increased 23 percent to 170.1 million francs ($189 million) beating the 153.9 million-franc estimate of analysts surveyed by Bloomberg. Currency-adjusted sales rose 8.1 percent to 592.6 million francs, also beating analyst estimates, fueled by recovering growth in the U.K., Nordic countries and Germany.

“While individual markets saw significant recoveries in the third quarter, at least temporarily, the overall trend of strongly diverging developments in the various markets continued in the first three quarters,” Geberit said today in a statement.

Geberit shares rose as much as 5.3 percent, the most since September 2011. The stock traded 5 percent higher at 265.50 francs at 11:20 a.m. in Zurich, giving the company a market value of 10 billion francs.

Geberit had “stunning growth” in Germany, France, the U.K. and Nordic countries in the third quarter, Oliver Girakhou, an analyst at Kepler Chevreux wrote in a note to clients.

Nordic Countries

In local currencies, sales in the U.K. and Ireland rose 18.7 percent in the nine-month period, while the Nordic countries showed a 7.9 percent increase and Germany a 6.8 percent rise. Geberit got about 90 percent of sales last year from Europe, with approximately 40 percent of revenue from Germany, according to data compiled by Bloomberg.

“Apart from a few markets such as Germany, Switzerland, Norway and Russia that are performing positively, a clear fall in demand has been seen in many markets since the fourth quarter of 2012,” Geberit said in the statement. “An end to this trend –- or a recovery -- is not in sight.”

The company confirmed a full year target of currency-adjusted sales growth of about 3 percent and an Ebitda margin of approximately 25 percent.

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