GEBERIT GROUP ANNUAL REPORT 2020 HIGHLIGHTS OF THE FINANCIAL YEAR 2020 Net sales Net sales development 2011–2020 (in CHF million) +1.3% Currency-adjusted net sales growth in 2020 0 EBIT, EBITDA, Net income, Net income development Earnings per share (EPS) 2011–2020 2018–2020 (in CHF million) (in CHF million) (EPS: in CHF) 2 4 2 4 2 4 1 1 1 9 3 3 3 6 3 0 0 0 * Adjusted for costs in connection with the Sanitec acquisition * Adjusted for costs in connection with the Sanitec acquisition and integration (EBITDA 2018 not adjusted) and integration Operating cashflow margin Free cashflow (EBITDA margin) (in CHF) 31.0% 717 million +170 basis points higher than +11.4% versus prior year prior year Geberit Annual Report 2020 1 Earnings per share Payout ratio (in CHF) 17.95 63.8% -0.1% versus prior year The payout ratio is in the upper range of the target corridor of 50 to 70% Investments in property, plant R&D expenditures and equipment and intangible (in CHF) assets (in CHF) 150 million 75 million -10.2% versus prior year 2.5% of net sales Currency effects in net sales Currency effects in EBIT (in CHF) (in CHF) -136 -43 million million Geberit Annual Report 2020 2 GEBERIT KEY FIGURES 2016 – 2020 2016 2017 2018 2019 2020 Net sales MCHF 2,809 2,908 3,081 3,083 2,986 Change Net sales on previous year % +8.3 +3.5 +5.9 +0.1 -3.1 Change Net sales on previous year % +6.4 +3.5 +3.1 +3.4 +1.3 c.a./org. Operating profit (EBIT)2 MCHF 687 706 744 757 772 Margin in % of Net sales2 % 24.4 24.3 24.2 24.5 25.8 Net income2 MCHF 584 604 626 647 642 Margin in % of Net sales2 % 20.8 20.8 20.3 21.0 21.5 Operating cashflow (EBITDA)2 MCHF 795 821 868 904 925 Margin in % of Net sales2 % 28.3 28.2 28.2 29.3 31.0 Free cashflow3 MCHF 557 476 582 644 717 Margin in % of Net sales3 % 19.8 16.4 18.9 20.9 24.0 Financial results, net2 MCHF -9 -9 -20 -14 -17 Capital expenditures MCHF 139 159 162 167 150 Research and MCHF 72 78 78 77 75 development expenses In % of Net sales % 2.6 2.7 2.5 2.5 2.5 Earnings per share2 CHF 15.85 16.43 17.21 17.97 17.95 Distribution per share CHF 10.00 10.40 10.80 11.30 11.40 Employees Number of employees (31.12) 11,592 11,709 11,630 11,619 11,569 Annual average 11,972 11,726 11,803 11,631 11,552 Net sales per employee TCHF 235 248 261 265 258 Balance sheet (31.12) Total assets MCHF 3,601 3,743 3,502 3,725 3,751 Liquid funds, marketable securities and other short-term MCHF 510 413 282 428 469 investments Net working capital MCHF 147 173 206 202 181 Property, plant and equipment MCHF 727 813 829 920 934 Goodwill and intangible assets MCHF 1,681 1,749 1,652 1,597 1,577 Total debt MCHF 971 895 837 837 779 Equity MCHF 1,635 1,837 1,745 1,899 1,922 Equity ratio % 45.4 49.1 49.8 51.0 51.2 Gearing % 28.2 26.3 31.8 21.5 16.1 ROIC2 % 21.5 22.4 22.6 23.1 23.2 1 Restatement see $ Note 1 in the consolidated financial statements of the Geberit Group 2013 2 2015 - 2018: Adjusted for costs in connection with the Sanitec acquisition and integration (EBITDA 2018 not adjusted) 3 2016 - 2017: Adjusted due to an internal reclassification Geberit Annual Report 2020 3 GEBERIT KEY FIGURES 2011 – 2015 2011 20121 2013 2014 2015 Net sales MCHF 1,868 1,920 2,000 2,089 2,594 Change Net sales on previous year % -1.7 +2.8 +4.2 +4.5 +24.2 Change Net sales on previous year % +8.9 +4.2 +3.1 +5.9 +2.7 c.a./org. Operating profit (EBIT)2 MCHF 449 457 511 577 591 Margin in % of Net sales2 % 24.1 23.8 25.5 27.6 22.8 Net income2 MCHF 384 388 436 499 493 Margin in % of Net sales2 % 20.6 20.2 21.8 23.9 19.0 Operating cashflow (EBITDA)2 MCHF 532 537 593 657 694 Margin in % of Net sales2 % 28.5 28.0 29.6 31.5 26.7 Free cashflow3 MCHF 386 391 444 460 484 Margin in % of Net sales3 % 20.7 20.4 22.2 22.0 18.7 Financial results, net2 MCHF -7 -7 -6 -2 -17 Capital expenditures MCHF 93 86 98 105 147 Research and MCHF 48 50 51 56 63 development expenses In % of Net sales % 2.6 2.6 2.5 2.7 2.4 Earnings per share2 CHF 9.82 10.16 11.59 13.28 13.23 Distribution per share CHF 6.30 6.60 7.50 8.30 8.40 Employees Number of employees (31.12) 6,004 6,134 6,226 6,247 12,126 Annual average 5,992 6,150 6,219 6,303 12,477 Net sales per employee TCHF 312 312 322 331 208 Balance sheet (31.12) Total assets MCHF 2,123 2,007 2,226 2,432 3,554 Liquid funds, marketable securities and other short-term MCHF 542 423 613 750 460 investments Net working capital MCHF 114 134 128 169 147 Property, plant and equipment MCHF 516 521 536 551 715 Goodwill and intangible assets MCHF 645 638 646 645 1,757 Total debt MCHF 76 15 12 11 1,139 Equity MCHF 1,420 1,431 1,664 1,717 1,482 Equity ratio % 66.9 71.3 74.8 70.6 41.7 Gearing % -32.9 -28.5 -36.1 -43.0 45.9 ROIC2 % 28.8 28.9 32.1 35.5 20.1 1 Restatement see $ Note 1 in the consolidated financial statements of the Geberit Group 2013 2 2015 - 2018: Adjusted for costs in connection with the Sanitec acquisition and integration (EBITDA 2018 not adjusted) 3 2016 - 2017: Adjusted due to an internal reclassification Geberit Annual Report 2020 4 GEBERIT GROUP BUSINESS REPORT 2020 Business report Editorial EDITORIAL Dear shareholders, We look back on a very good business and financial year – despite the COVID-19 cri­ sis. The currency-adjusted sales growth was due to our strong market position, suc­ cessful crisis management, the conscious decision to not furlough employees in or­ der to also maintain the levels of contact with customers during the lockdown peri­ ods, and a rapid transition to a digital customer service approach. Thanks to further improved, high profitability, we succeeded in further consolidating our position as leading supplier of sanitary products and gained further market shares. SALES GROWTH DESPITE CRISIS In 2020, net sales in Swiss francs fell by 3.1% to CHF 2,986 million. This development includes negative currency effects of CHF 136 million. In local currencies, this result­ ed in an increase of 1.3%. This currency-adjusted growth was achieved despite the significant sales decrease seen in the second quarter as a result of COVID-19. Oper­ ating profit (EBIT) rose by 2.0% to CHF 772 million, and the EBIT margin reached 25.8% (previous year 24.5%). This increase in the margin was mainly due to the COVID-19-related cost savings (particularly marketing and travel expenses), the high levels of flexibility in production and logistics, lower raw material prices, the natural currency hedging, and price increases. Thanks to these measures, it was also possi­ ble to compensate for the significant tariff-related increases in personnel expenses and additional investments in digitalisation initiatives. Net income dropped slightly by 0.7% to CHF 642 million due to a higher tax rate and a lower financial result, with a re­ turn on net sales of 21.5% (previous year 21.0%). While earnings per share fell by 0.1% to CHF 17.95, an increase was seen in local currencies. The higher operating cashflow, successful management of net working capital during the crisis and lower investments in property, plant and equipment due to COVID-19 had a positive im­ pact on cashflow. Despite negative currency effects, free cashflow increased by 11.4% to a new record high of CHF 717 million, corresponding to 24.0% of net sales (previous year 20.9%). GEBERIT AND COVID-19 From mid-March to mid-May, the construction industry in Europe was massively im­ pacted by the COVID-19 pandemic. In several countries – Italy, France, the United Kingdom and Spain – most construction sites remained closed for extended periods. Meanwhile, in the other countries the restrictions enforced as a result of the pan­ demic led to a slowing of construction activities. Moreover, the showrooms for sani­ tary products across Europe remained largely closed for around two months. Out­ side Europe, construction activities were also massively affected in some regions. The decline in net sales at Geberit during this period was unprecedented in the scale, speed and simultaneity of events. Net sales fell by 29% in April and by 15% in May – the biggest monthly declines in sales seen for decades and also significantly greater than those seen in 2008/2009, for example. In these two months, volumes de­ creased by 23%. Despite the restrictions enforced due to COVID-19, the supply chain at Geberit re­ mained intact during 2020.