By Anastasiia Kozlova
(Reuters) -Building materials supplier Geberit on Wednesday posted second-quarter earnings below analysts’ expectations and said it expects a continued decline in new construction activity across Europe in the second half.
Core profit (earnings before interest, taxes, depreciation and amortisation) came in at 236.9 million Swiss francs ($293.23 million), down 2.3% from 242.6 million Swiss francs during the same period a year ago, falling behind analysts’ consensus by 2%.
In a research note, JP Morgan said that Geberit’s second-quarter earnings miss was likely to weigh on the shares.
The stock was seen down 2.7% in Julius Baer pre-market indications.
Until this week, the stock had risen 22% in the year-to-date, significantly outperforming the Swiss blue-chip index SMI, which gained just 4%.
Some analysts cited the company’s ability to raise prices to protect its profit margins and early signs of recovery in Germany’s construction sector as reasons for its strong share performance.
For 2025, the company expects growth in net sales in local currencies of around 4% and an EBITDA margin of around 29%.
Europe’s construction industry has faced significant headwinds, including inflation, high energy prices, and growing economic and geopolitical uncertainties. These challenges have hit countries like Germany particularly hard, where the property market has been in a steep decline since 2022.
Geberit said it remained optimistic about its renovation business, which accounts for about 60% of its sales. It expects that business to maintain a strong performance, helping to offset weakness in new builds.
Outside Europe, Geberit forecasts a mixed performance with a slowdown in China’s residential construction, but a strong demand in India and the Gulf region.
The impact of U.S. tariffs remains negligible due to the company’s strategy of using local manufacturing, it added.
($1 = 0.8079 Swiss francs)
(Reporting by Anastasiia Kozlova in Gdansk; editing by Matt Scuffham)
