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UPDATE 1-Geberit expects 2017 sales to grow towards low end of guidance
October 31, 2017 / 7:46 AM / 2 months ago

UPDATE 1-Geberit expects 2017 sales to grow towards low end of guidance

(Adds detail, share price reaction)

By John Revill

ZURICH, Oct 31 (Reuters) - Geberit expects its full-year sales to rise by 3 percent, the low end of its previous guidance, the plumbing supplies maker said on Tuesday while reporting weaker-than-expected sales in the third quarter.

The Swiss group, which also makes shower toilets, said sales rose 5.8 percent to 733 million Swiss francs ($736 million) in the three months ended September 30, missing the average estimate of 746 million francs in a Reuters poll.

Geberit’s previous guidance was for sales to increase by 3 to 4 percent when currency effects were removed.

Net profit and earnings before interest, tax, depreciation and amortisation also missed expectations, sending the stock 1.9 percent lower in premarket indications.

Geberit, which gets around one-third of its revenue from new building projects and two-thirds from refurbishment work, is seen as an indicator for the health of the building materials market in Europe.

The company said its sales were hampered by a lower number of working days compared with the year-earlier quarter and a lower order backlog to work through.

It said Europe posted growth of 2.3 percent in the first nine months, although its two biggest markets of Germany and Switzerland struggled, with an increase of just 0.2 percent.

In Germany, a shortage of installers in the construction industry “severely limited” growth, Geberit said.

The company has been hampered by customers in Germany switching to cheaper lavatories, shower basin and other products as they shift to lower-end construction projects like multi-family dormitories being built to house an influx of refugees.

$1 = 0.9959 Swiss francs Editing by Michael Shields

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