Good morning, ladies and gentlemen, and welcome to Geberit's full-year sales conference call. We will first comment on our fourth quarter sales figures, then review our full-year sales performance, followed by our guidance for the operational and financial results in 2025, and finish, as usual, with the outlook for this year. Let me start by giving you some comments on the sales development in the last quarter. Net sales increased by 4.4% and reached CHF 715 million in Q4 last year. The unfavorable currency development affected net sales negatively by CHF 14 million, or - 2%. In local currencies, group net sales grew by 6.4%, driven by volume growth of around 5.5% and the sales price effect of around 1%. The strong growth in the last quarter was driven by growth in almost all markets and strong support from new products.
Q4 was also a bit better than expected due to strong year-end sales, driven by disproportional purchases from wholesalers in December to achieve better bonus levels. Let me now comment on the sales development in the fourth quarter in more detail. I'll start with the regional overview. We recorded strong growth in Central Europe, with Benelux up 11%, Germany up 5%, and Switzerland, Italy, and Austria each up 3%. Net sales in Northern Europe increased by 8% and in Western Europe by 4%. Both regions benefited from a weak quarter in the previous year. Eastern Europe was the only region in Europe that recorded a small sales decline, - 1% in Q4, due to a very strong growth in Q3 of + 15%. Outside Europe, net sales increased in Middle East Africa by 36%, driven by a strong project business, especially in the Gulf region.
In Far East Pacific, by 17%, with strong sales in India and North and Southeast Asia, for example, in Vietnam, offsetting the decline in China. In America, net sales declined by 2%, negatively affected by the U.S. government shutdown. I continue with the sales development per product area in Q4, again in local currencies. Bathroom systems grew by 10%, installation and flushing systems by 8%, while piping systems grew by 2%. The lower relative growth of piping systems was driven by the higher exposure to the new-build sector. We will now comment on the full-year 2025 sales performance. Net sales in Swiss francs increased by 2.5% to CHF 3.2 billion, negatively affected by strong currency effects. Negative currency effects led to a net sales loss of CHF 72 million, or - 2.3%.
In local currencies, net sales increased by 4.8%, almost fully driven by volumes, as well as a slight positive sales price effect. With an organic and currency-adjusted growth rate of 4.8%, we significantly outperformed the market development. The main reasons for our market share gain last year were, firstly, our undiminished market presence and sales efforts since mid-2022, when the European building construction industry started to collapse. Secondly, strong sales with newly introduced products such as FlowFit, Mapress Therm, and the shower toilet Alba, despite the unfavorable market environment, and thirdly, the success of dedicated sales initiatives and investment outside Europe, for example, in India, Vietnam, or in the Middle East region. Moving now to the net sales growth per region, again, all growth figures refer to growth in local currencies. I'll start with the review in Europe, where we achieved a sales growth of 4%.
In Austria, net sales increased significantly by 8%, thanks to strong growth of our new products. In Benelux, net sales increased by 7%, with growth in both countries, Belgium and Netherlands. In Germany, net sales increased by 6%, significantly better than the market. In Eastern Europe, net sales increased by 4%, supported by strong growth in the Adriatic region. Net sales in Northern Europe increased by 3%, with growth in all Nordic markets. In Italy, net sales were up by 2% in a softening new-build market. In Switzerland, net sales increased by 1%, negatively affected by selective price adjustments due to the strengthening of the Swiss franc over the last years. In Western Europe, net sales were flat, with strong growth in Iberia, offsetting the market decline in France. Let me now turn to the regions outside Europe.
We recorded very strong growth of 25% in Middle East Africa, with strong growth across the whole region. In America, net sales increased by 4% due to the strong U.S. faucet business. In Far East Pacific, net sales decreased slightly by -1%, with strong growth in India and Vietnam, only partially offsetting the market decline in China. Let me now comment on the sales development per product area, again in local currencies. Bathroom systems grew in the full year by 6%, installation and flushing systems by 5%, and piping systems by 3%. The slightly lower relative growth of piping systems was driven by the higher exposure to the new-build market, which was still declining last year. Let me now comment on our guidance for our 2025 operational and financial results. The EBITDA margin for the full year is expected to be slightly below 29.5%.
The increased EBITDA margin guidance versus our Q3 communication was mainly driven by the slightly better-than-expected sales development in Q4. The EBITDA margin guidance includes site closure costs of EUR 18 million for the ceramic plant closure in Wesel, all booked in 2025. The full-year closure costs are unchanged from our Q3 communication beginning of November last year. The full tax rate 2025 should be around 19%, and CapEx is expected at around CHF 180 million. Let me now comment on our market outlook for 2026. After the significant decline of the European building construction industry since mid-2022, the market stabilized last year. In the course of this year, we expect a slight market growth; however, no broad demand recovery yet.
In Europe, overall, building permits were flat in the first nine months of last year since the still slightly declining non-residential building permits were fully offset by an increase of residential building permits. This indicates a stabilization of the new-build activities in 2026 after the strong decline over the last three years. In the renovation sector, which accounts for around 60% of our business, we expect a positive environment, as indicated by several market indicators, for example, increasing real estate transactions. Let me now turn to the regions outside Europe, where we expect a mixed picture for the building construction industry in 2026. We expect an ongoing strong demand in several markets, for example, in India or the Gulf region. Other markets will continue to decline, for example, China due to the collapse of the new-build sector in China.
After this market outlook, let me now come to the Geberit outlook and our priorities this year. In the light of the slightly improving market environment, our overarching objective remains to further strengthen our market position in 2026 with several strategic initiatives, for example, with the introduction of new products in all three product areas this year, or the ongoing focus on important new products successfully introduced in recent years, like the already mentioned piping systems FlowFit and Mapress Therm, and the shower toilet AquaClean, or the Duofix installation element, which we launched last year. Two other important initiatives this year include further investments in IT, digitalization, and artificial intelligence. And secondly, a new dedicated marketing initiative targeting end consumers, architects, and interior designers. In total, we will increase operational expenses for these IT and marketing initiatives by CHF 20 million in 2026.
A major initiative in operations this year will be the start of the expansion and renewal of our logistics capacity with two main projects. The first project consists of the construction of a new greenfield logistics center in Ibbenbüren, Northern Germany, as already announced last year. The purpose is to increase capacity and to mitigate risks from our existing main logistics center in Pfullendorf. The second project comprises of a new distribution center in Bromölla, Sweden, to consolidate and modernize our logistics activities for our ceramics business in the Nordic region. Both of these large projects are currently in the final planning phase. Construction starts are both planned in the second half of this year, with the objective to ramp up operations in Sweden as of 2028 and in Germany as of 2029.
Total CapEx for both new logistics centers are currently estimated to be around EUR 250 million and will incur over the next four to five years. These two major logistics investments will lead to higher CapEx this year of around CHF 230 million. With this, I come to our pricing this year. In terms of pricing, we will implement a regular sales price increase of around 1% as of Q2 this year. With regards to our two largest P&L cost positions, we expect a wage inflation of around 3% this year and a slightly increased direct material prices in Q1 compared to Q4 last year due to the recent increase of several metal prices, for example, copper. Let me close our introduction with a short summary. With a currency-adjusted top-line growth of 4.8%, we achieved again a strong growth and market outperformance last year.
These results confirm that we are successfully navigating through the significant market decline of the European building construction sector over the past three and a half years and that our two guiding principles during this downturn, strategic stability and operational flexibility, are paying off. Our market share gains are driven by our undiminished market presence and sales efforts, new product introductions, and dedicated sales initiatives outside Europe. For 2026, we expect overall demand to slightly improve. However, no broad market recovery yet. We will continue to invest this year in several sales and marketing initiatives, in innovation, efficiency, and also in capacity to further strengthen our market position in and outside Europe. Thank you for your attention. We are now ready to answer your questions.
We will now begin the question and answer session. Anyone who wishes to make a question or make a comment may press star and one on the telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. Our first question comes from Daniela Costa from Goldman Sachs. Please go ahead.
Hi, good morning. I have three, but very quick follow-ups on things that you've normally, well, two of them on things that you normally commented on in prior quarters. But maybe I'll start one by one. Can you comment a bit on inventories at distributors? What have you seen lately?
Yes. The inventories at the end of the year are a little bit higher than usual because, as we said in our introduction, the wholesalers had a bit disproportionate purchases in December to achieve better bonus levels. So they're slightly higher than what they would have been normally.
Thank you. And sometimes you comment on how the quarter is starting. I know it's very few working days so far, but do you have any very preliminary January daily sales views?
We only have seven or eight working days of this quarter, so that's really too early to comment on the quarter.
Okay. And then just on the pricing itself, you said 1%. Normally, how dynamically can you think about this until you get to, I think it's normally the April point? Because I understand sort of you're still seeing year-on-year tailwinds from raw materials, but there's been some quite big spikes in the beginning of this year. How set is it like a pricing list for the 1% they have gone through, or do you still have flexibility to do more than that by then if the raw material situation continues to spike?
Yes, indeed. We've seen some price or cost increase on the direct material side, and as usual, we'll communicate the price increases later on with the full years.
So the 1% is not a firm number, a number you can still move?
Oh, sorry. That was a misunderstanding. You talked about the 1% sales price increase. That's a firm number that has been implemented and that is now executed. So there will be no change about this 1% if this was your question.
Yeah. So if the raw materials spike in the next month or two until the price increase takes impact, you will not pass that through?
Correct. At the moment, we do not expect that raw material prices are going up so heavily that this would require an extraordinary price increase.
Got it. Very clear. Thank you.
The next question comes from Anna Schumacher from BNP Paribas. Please go ahead.
Good morning. Thank you for taking our questions. It's Anna Schumacher on for Paul Roger. My two questions are, firstly, you sound quite cautious on a European recovery despite better permit data. Is this you being conservative, or is there something in the market that you're seeing which holds you back? And secondly, is there a reason to think local currency sales growth will decelerate versus H2 2025 this year? Is the Q4 exit rate a good indication of what to expect going forward?
Thank you for your questions. Quite hard to understand. I didn't understand question number two. Maybe you can repeat it. But the answer to question number one about our outlook for Europe this year. This is not a conservative outlook. This is an outlook which is based on indicators which we have, meaning the building permits which have only stabilized last year, a certain positive environment for renovation. That's the reason why we expect only a slight growth of demand for Europe this year and no broad recovery. Question number two, sorry, we didn't understand. Can you repeat it?
Yeah. Are there any reasons to think that local currency sales growth will decelerate versus H2 2025 this year? Basically, is the exit rate of 2025, should we think of that being the same in 2026 or a bit lower?
Understood. So in terms of our guidance for our own sales figures in local currencies, we only give an outlook for that with our H1 figures. But of course, we also aim this year for market share gains.
Okay. Thank you.
The next question comes from Élodie Rall from JP Morgan. Please go ahead.
Hi, good morning. Thanks for taking my question. So I'll limit to, first of all, a follow-up on what you've said already in terms of cost expectations for Q1 and the 1% price increase that you are pushing from Q2, if I understood correctly. Does that mean that we should expect some margin compression in Q1 and then potentially stable margin for the full year post the price increase? So that's my first question. My second question is with regard to the competitive pressure that you might be seeing in the market and the market share gains that you've seen as the end market recovers. Do you see any competitors that have dialed back capacity potentially restoring it?
Thank you for your question, Élodie. As usual, we don't give indication on the profitability, so no guidance there, but we give you the various elements with which you can update your model. So here, no further comment from our side. The second question with regards to competitors, we believe we have benefited from some weak competitors over the last three and a half years when the market declined, also maybe driven by the fact that some competitors have pulled back some of their efforts in marketing and sales.
Most probably, if the market becomes better and improves, we would also expect that some of these competitors are gaining back a bit their efforts. And I wouldn't call that an increase in competitive pressure, but I would expect that in a better market environment, also the activities of competitors will increase.
Okay. Thank you.
The next question comes from Martin Hüsler from ZKB. Please go ahead.
Thank you and good morning, everyone. Maybe first a question on some countries or regions with remarkable developments in Q4, maybe starting with Benelux with 11.3%. Is this kind of a broad recovery that you see there, which should also continue next year or this year? The main reason why we had such strong growth in Q4 in Benelux was driven by the Netherlands and two reasons. One was also there. We had disproportionate purchases from wholesalers to achieve better bonus levels.
And secondly, there were some specific sales campaigns running in the Netherlands in Q4. So I would not take the Q4 number as a predictor going forward for the structural growth in the region. And the second question of the first of all question, maybe to Western Europe, which is France, U.K., also quite an improvement against nine months or Q3 4.2%. Can you break this down to France and U.K.?
Yes. All of the three countries, Iberia is also in there. All three of these countries or regions were positive in Q4. However, keep in mind that Q4 in the previous year was quite weak, especially in France and also U.K. So there was also a certain base effect which helped in Q4 2025.
And then my last question at that point is maybe a qualitative assessment on Germany. I remember that last spring, there was a rather positive sentiment driven by new government, some programs there, also at the ISH. My question is now, what is your assessment today of the sentiment? If you talk to customers, wholesalers, installers, still positive or kind of a disillusion after maybe some political setbacks there?
That's a very difficult question to answer. First, what we see in the market in terms of numbers and sales, we haven't seen a big impact of this infrastructure program yet in our sales numbers and projects. On the sentiment, more the soft area, I wouldn't say a disappointment, but I would say that the expectations were maybe slightly higher than what people expected nine months or 10 months ago.
Understood. Thank you.
The next question comes from Arnaud Lehmann from Bank of America. Please go ahead.
Thank you very much. Good morning, gentlemen. First, I have a couple of questions, please. Firstly, on your raw materials, could you confirm that typically industrial metals are about 40%, then you have about 25% related to plastic?
Correct.
Thank you. And the second question is in terms of Q4 trends. Looks like there was a bit of a deceleration in Eastern Europe. On the other hand, looks like there was a bit of an acceleration in Western and Northern Europe. If you could please give us a bit of color on those?
I would say all of these three regions were affected by base effects. Eastern Europe was negatively affected by a very strong Q3. In Q3, we were growing 15%. That impacted obviously also Q4 because some of the Eastern European countries are project-related, for example, Adriatics, and we had just strong project business in Q3, which led to a weaker Q4.
As previously mentioned, in Western and Northern Europe, both were benefiting from weak previous year's quarters. In Western Europe, Q4 2024 was - 7%, and in Northern, it was - 4%. So that was the main reason why there was a certain acceleration in Q4 2025 in these two regions.
That's very clear. Thank you so much.
The next question comes from Chase Coughlan from Lanschot Kempen. Please go ahead.
Hi, good morning all, and thank you for taking my questions. I have two, and I'll take them one by one, please. Just to clarify on your point about the disproportionate ordering from wholesalers in Q4, does that imply that we should see a normalization in Q1 and potentially less orders there, or how should I look at that?
I don't want to speculate about the January, but as I said previously, that the inventory levels are a little bit higher end of last year than what they would have been in normal times because of these slightly disproportionate purchases from wholesalers to get better bonus levels.
Okay. Thank you. And then regarding the investments in digitalization and AI, can you give a bit more details on sort of where exactly these are going? Should these have cost synergies, or is this more on a revenue synergy kind of standpoint, or just any more color there, please?
On the marketing, it's broad-based. It's also some B2C campaign that we're planning. And on the IT and AI side, it's general infrastructure, but also various new tools which make life of our salesforce and operations easier as well, including artificial intelligence investments.
Okay. Perfect. Thank you, gentlemen.
The next question comes from Yassine Touahri from On Field Investment Research. Please go ahead.
Thank you very much. Two questions on my side. First, could you give us a little bit more color on the bonus program that you're offering to wholesalers? How does it work? Is that if they meet a specific volume quota, they get a discount on the price that they agreed? There is a price that changes depending on the volume that they achieve. It would be great if you could give us a bit more color. And the second point is you're mentioning an increase in copper price. Is it something? Could you quantify approximately what is copper or the copper-related product as a percentage of your cost or as a percentage of your sales? And if there is any other material like nickel or steel that we should look at as well?
First question about the bonus programs or logic with wholesalers. These bonuses, calculated always on a yearly basis, are not only dependent on volumes. There are also other KPIs like market activities or if they keep products on stock or not. But the main driver, obviously, is volume, and there it's a very simple logic, obviously. If they achieve certain volume levels or higher volume levels, they get higher bonuses. This was the driver for the very strong year-end. Second question, how much of our raw materials are directly linked to copper in terms of percentage? Sorry, I can't give you a number. We don't know that because we have copper in various, also semi-finished products included, not only as a raw material. It's even predominantly in semi-finished products. Therefore, I can't give you a sharp number in percentage how much is driven by copper.
What are the other key materials that we should look at? Is that steel, nickel?
Yes. The other main metals, steel, as you said, nickel, aluminum, and zinc. These are the main metal raw materials driving our metal basket of direct material costs.
Thank you very much.
You're welcome.
The next question comes from Patrick Rafaisz from UBS. Please go ahead.
Thanks, and good morning, everyone. Two or three questions from me as well, please. Can you talk about the share of new products in this revenue mix in 2025, and how should we think about the ranking in terms of growth contribution of FlowFit, Mapress, Alba, and Duofix? Is that something you can qualify a bit? And then the second question would be on the CHF 20 million of expenses for marketing and digital investments.
Is that, first of all, a sustainable recurring investment, or is there an element that will phase out in 2027? And secondly, should we just assume an equal split, CHF 5 million every quarter for that? And then lastly, on the third question on the wholesale pull effect and bonuses, because you said right in October, trading was in line with the full-year plans of around 4.5%. Would you say the delta of 4.5%- 6.5%, was that a good proxy for the wholesale stocking effect? Thank you.
I take question number one and three, and number two will be answered by Tobias. I start with number three. The short answer is yes. We think that the main driver, do you hear us? Because we hear music. Sorry?
I guess the participant muted his line. That's why.
Okay.
So again, the question about how important was this disproportionate purchase from wholesalers end of the year? Yes, this was the main driver. And as I said in our introduction, the reason why we were a bit better in Q4 than what we expected after we have seen October sales last year. The first question about the share of new products, we don't have yet the exact numbers, but these new products, FlowFit, Mapress Therm, Alba, were very important for growth contribution last year. And I don't want to make a ranking along these three products because of competitive reasons. Which one was the biggest contributor, and which one was the lowest contributor? And question number two is answered by Tobias.
So yes, the CHF 20 million, we expect them to be sustainable. So count for that as well in 2027, even though there's project ending, etc.
But that is really additional investment we're planning both on the IT and the marketing side. As for the split within the year, it's roughly equal split, but I expect less cost in Q1, and they're more spread over than the remaining quarters.
The next question comes from Christian Arnold from ODDO BHF. Please go ahead.
Good morning, all. Question on your pricing. Last year, you had to decrease your prices in Switzerland. Is it fair to assume that now, given that Swiss franc, euro is rather stable, that we don't see another price decrease this year in Switzerland?
You're correct, but we made a lower price increase in Switzerland compared to the other countries.
Okay. Okay. And could you remind me when your price decline occurred last year? Was it from the beginning of the year or later?
Basically, we implemented it as of Q2 in Switzerland, but we had this negative bonus effect already at the beginning of the year, you might remember.
Yes. Okay. Very good. And the second question would be on your CapEx plans in Germany and Sweden or the extraordinary CapEx plans here. Did I understand it correctly? In Germany, we are talking here mainly about logistics, whereas in Sweden, it's also production capacities, which you are increasing?
No, this is a misunderstanding. Both projects are related only to logistics.
Okay. Very clear. And could you split it up, these 250 between Sweden and Germany?
Not yet, or we could, but we don't want yet because we are currently finalizing the planning phase. And once we know the exact CapEx for both individual projects, we will communicate it, but not at the moment.
Okay. Thank you very much.
You're welcome.
As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Harry Dow from Rothschild & Co. Please go ahead.
Yeah. Thank you. Good morning, everybody. I think we've got three questions, if that's okay. Just firstly, I think in the release, you mentioned potential for new products in 2026. I wonder whether you can give any more color there. Is it planned for sort of large announcements like Duofix, Alba again, or sort of more incremental improvements for 2026 new products? And maybe I'll take them one by one if that's okay? Thank you.
We will have several new product introductions this year in all of the three product areas. We will talk about them in more detail at our Full Year C onference, as usual, mid-March, when we also can present them physically. But we have important and nice product introductions this year. And don't forget that also products we launched last year, for example, the new Duofix, which we have launched, one of the most important products we have in our portfolio, we count as an innovation, a new product this year because it's still a big effort of the sales and marketing activities this year to further penetrate this innovation, which we launched last year as well.
Great. Thank you. Understood. And on bonuses to wholesalers, I was just wondering whether there has been any change last year or over the last couple of years on the amount given to wholesalers, especially the same amount of volume that's being achieved, which is whether bonuses are increasing or decreasing that you're having to give to wholesalers for certain levels of volumes.
No, there was no structural change. There was no structural change in the bonus system, and don't overestimate the effect of these bonus levels. That was just the reason why it was a bit stronger in December, but this doesn't have a material impact on also our pricing last year, for example, if this is your question.
Okay. Great. Thank you, and then just finally, on the sort of special investments again this year, I think 2026 will be the sort of third year of these extra investments in operating costs. And I think you mentioned because that's just on investing when volumes are lower. Should we read maybe as the market improves, therefore, maybe in 2027 and beyond, that maybe there's less need for some of these special investments beyond then, or we should see these continue?
This is too early to answer your question. That depends then on 2027 or the end of this year when we think about our focus topics, priorities for 2027. So I can't give you yet an answer what we will do and if we might have further OpEx than in 2027 again or not.
Okay. Great. Thank you.
The last question for today comes from Danny Kallan from Reuters. Please go ahead.
Hi, this is Danny Kallan from Reuters. I have two questions, and I'll take them one by one, please. Firstly, I believe you're involved in reconstruction projects in Ukraine. How much progress have you seen here, and to what extent do you expect these projects to affect you and the sector in 2026?
We don't know yet how much will come this year from this project. It's not that material for the group, to be honest. It's very important locally. But for the group, it's not that material. And I can't give you a figure how much of the project will be delivered this year already.
Thank you. And then I guess following on from that, to what extent have you seen reconstruction demand in other conflict zones such as Gaza?
Gaza, we are active in Israel, but we don't have, as far as I know, yet delivered any products or sales into the Gaza region, to be honest. But I'm not in all the details involved there. Sorry.
Thank you.
Ladies and gentlemen, this concludes today's question and answer session. I would now like to turn the conference back over to Christian Buhl for any closing remarks.
Thank you for your participation and your questions. We wish you all a great day. Thank you, everybody.