Plumbing provider Geberit to hike costs once more as prices rise

The logo of shower toilet and plumbing supplies maker Geberit is seen at its headquarters in Rapperswil-Jona, Switzerland October 30, 2018. REUTERS/Arnd Wiegmann

Register now for FREE unlimited access to Reuters.com

register

• Higher raw materials costs trigger profit dip
• Company will lift prices by an average 7.5% in July
• Group sees good demand across building sector

ZURICH, May 4 (Reuters) – Geberit (GEBN.S) will raise prices again this year as it tackles “an unprecedented surge” in raw materials costs hitting the construction industry, the Swiss plumbing products maker said on Wednesday.

The company – seen as a proxy for the broader construction sector, as its products, such as bathroom ceramics and pipes, are so widely used – had already imposed one extraordinary price hike in January and an annual price rise in April.

“Due to the expected acceleration in raw materials price inflation we will implement another extraordinary price increase of an average of 7.5% as of July this year,” Chief Executive Christian Buhl told reporters.

Register now for FREE unlimited access to Reuters.com

register

That would come on top of the 1.5% price rise in January and the April increase of 2.5%.

Geberit said it expects the raw materials it uses to become 10% more expensive during the second quarter compared with the first three months of the year, making them 28% more expensive than a year earlier.

The company is just the latest to warn about rising costs for inputs like energy, metals and plastics. Reuters reported earlier this week that Italy plans to set aside around 7 billion euros ($7.35 billion) to help construction firms cope with spiraling costs.

Higher input costs took the shine off a near 8% rise in sales during Geberit’s first quarter, with the company’s operating profit falling 5% in the same period.

Buhl said the company was able to find the raw materials it needed to make its products, but faced difficulties.

“Every week we have a new challenge,” he said. “It’s a long list of raw materials… some smaller things like pallets, but it’s really across the board.”

Still, demanded remained strong in both the new build and renovation sectors, he said, despite higher prices and interest rates.

The company also plans a new share buyback program of up to 650 million francs, to start in the third quarter at the latest.

($1 = 0.9796 Swiss francs)

Register now for FREE unlimited access to Reuters.com

register

Reporting by John Revill; Editing by Michael Shields and Jan Harvey

Our Standards: The Thomson Reuters Trust Principles.