Geberit : Quarterly report as of 30 September 2017

Quarterly report as of 30 September 2017

Geberit AG, Rapperswil-Jona, 31 October 2017

In the first nine months of 2017, the Geberit Group's net sales increased by 1.4% to CHF 2,202.3 million. This figure includes negative currency effects of CHF 4 million and the turnover-reducing sale of Koralle and Varicor. In local currencies and in organic* terms, net sales rose by 3.0%.

Net sales for the third quarter grew by 5.8% to CHF 733.0 million, an increase of 3.3% in currency- adjusted, organic terms. This development was negatively affected by a lower number of working days compared to the prior-year quarter as well as by a reduction in order backlogs in the shower toilet business in the previous year.

In organic terms and local currencies, Europe - the largest region - posted growth of 2.3% after nine months of the year. The Iberian Peninsula (+11.9%), Austria (+8.5%), Italy (+7.6%) and Central/Eastern Europe (+6.7%) made strong gains. France (+3.4%), the Benelux Countries (+3.3%), the Nordic Countries (+2.9%) as well as Germany and Switzerland (both +0.2%) also made gains. In Germany, capacity constraints of installers in the construction industry continued to inhibit growth. Net sales were down in the United Kingdom/Ireland (-7.8%). Double-digit growth was posted in the Far East/Pacific (+16.0%) and Middle East/Africa (+14.6%) regions. Net sales in America rose by +2.7%.

In the product areas, Sanitary Systems achieved currency-adjusted organic growth of 5.9%. Piping Systems also increased its net sales by 3.3%. Net sales in the product area Sanitary Ceramics dropped by 2.9%.

As in previous years, one-off costs related to the Sanitec acquisition had an impact on the Geberit Group's results. Therefore, adjusted figures will be shown and commented on for comparability purposes. Adjusted operating cashflow (adj. EBITDA) increased by 0.2% to CHF 653.0 million, which corresponds to an adjusted EBITDA margin of 29.7% (previous year 30.0%). Adjusted operating profit (adj. EBIT) decreased by 1.0% to CHF 568.5 million, which corresponds to an adjusted EBIT margin of 25.8% (previous year 26.4%). The operating results were negatively affected primarily by higher

raw material prices, personnel expenses and depreciation. Increased sales volumes, a positive product mix effect and synergies from the Sanitec integration had positive effects. Adjusted net income decreased by 1.1% to CHF 485.9 million on account of a higher tax rate related to the closure of two ceramics production plants in France, with an adjusted return on net sales of 22.1% (previous year 22.6%). Adjusted earnings per share were down 1.0% to CHF 13.20 (previous year CHF 13.34). The share buyback programme launched at the beginning of June 2017 did not yet have any significant impact on this key figure.

Negative one-off effects as a result of the Sanitec acquisition/integration amounted to CHF 48 million as regards EBITDA, CHF 75 million as regards EBIT and CHF 69 million as regards net income. CHF 45 million in costs recorded in the second quarter in relation to the closure of two ceramics production plants in France had a significant impact on these figures.

Negative one-off effects explain the slightly lower net cashflow. Free cashflow fell by 11.5% to CHF

361.3 million due to a stronger year-on-year increase in net working capital.

The Geberit Group's financial situation remains very healthy. The equity ratio increased from 45.4% to 47.8%. Despite the positive cashflow, net debt (debt less liquid funds) increased as planned from CHF 461.2 million as at 31 December 2016 to CHF 550.0 million. This increase is mainly attributable to the dividend payment of CHF 368.4 million to shareholders and the share buyback programme launched in June 2017.

The integration and the closure of two plants in France, the latter of which was announced in July 2017, continue to proceed according to plan. In 2017, one focus is on further consolidating the country organisations. We also continue to harmonise systems and processes, in addition to further developing the product range and making ongoing optimisations in ceramics manufacturing.

Overall, demand in the construction industry is positive in 2017. Individual regions/markets and construction sectors continue to perform very differently, however. A positive market environment is expected in the Nordic Countries, Switzerland, Austria, France, the Benelux Countries and the countries of Eastern Europe. Despite healthy demand, growth potential in Germany is severely limited due to capacity constraints of installers. A stable market environment is forecast for Italy, whereas the situation in the United Kingdom remains uncertain as a result of Brexit. In North America, the institutional construction industry - key to Geberit's business - is expected to stagnate, while residential construction is predicted to grow moderately. In the Far East/Pacific region, the Chinese residential construction sector has been developing positively since the start of the second half of 2017; the business climate in Australia and India is expected to be positive. The market environment in the Middle East/Africa region remains stable.

The results achieved by the Geberit Group in the first nine months give the company every reason to be confident of also being able to achieve solid results for the full year 2017. The effect of continually rising raw material prices will continue to present a challenge. Management expects currency- adjusted net sales in organic terms to grow by around 3% for 2017. The adjusted operating cashflow margin (adj. EBITDA margin) for the full year should reach around 28%.

Geberit AG

Schachenstrasse 77, CH-8645 Jona

Christian Buhl, CEO Tel. +41 (0)55 221 63 46

Roland Iff, CFO Tel. +41 (0)55 221 66 39

Roman Sidler, Corporate Communications & IR Tel. +41 (0)55 221 69 47

The globally operating Geberit Group is a European leader in the field of sanitary products. Geberit operates as an integrated group with a very strong local presence in most European countries, providing unique added value when it comes to sanitary technology and bathroom ceramics. The production network encompasses more than 30 production facilities, of which six are located overseas. The Group is headquartered in Rapperswil-Jona, Switzerland. With around 12,000 employees in around 50 countries, Geberit generated net sales of CHF 2.8 billion in 2016. The Geberit shares are listed on the SIX Swiss Exchange and since 2012, have been included in the SMI (Swiss Market Index).

Please visit our website www.geberit.com for additional information.