Geberit AG Annual Report 2004

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Business and Financial Review
Sound equity base and balance sheet structure

Thanks to the free cashflow, which was again at a very high level, the Geberit Group’s balance sheet integrated the Mapress acquisition very well as of year-end 2004. The increase in debt of MCHF 238.1 to MCHF 535.3 was due to the funding of the acquisition. As a result, net debt increased by MCHF 337.8 to MCHF 453.7.

Debt (in MCHF)
	12/04	12/03	12/02
Long-term debt	531.7	293.6	367.5
Total debt	535.3	297.2	432.0
Cash and cash equivalents	81.6	181.3	137.5
Net debt	453.7	115.9	294.5

Despite the acquisition, the equity ratio amounted to a sound 43.5% at the end of 2004. In terms of average shareholders’ equity, the Group was able to increase its return on equity to 24.0% (prior year 21.5%) in 2004. As a result of the acquisition, the gearing (net debt/shareholders’ equity) rose from 15.7% in the prior year to 52.1% as of 31 December 2004.

The Group’s liquidity situation was comfortable. In addition to liquid funds in the amount of MCHF 81.6, the Group had access to operating credit facilities of MCHF 174.1, which remained un-drawn as of 31 December 2004.

As of 31 December 2004, the Geberit Group held 66,480 of its own shares in treasury, corresponding to only a minor increase versus the prior year. Treasury shares are primarily earmarked for stock ownership plans.

In the year under review, total assets rose by approximately MCHF 500 to MCHF 2,003.9 (prior year MCHF 1,507.8) as a result of the Mapress acquisition. Also due to the acquisition, net working capital increased to MCHF 130.9, goodwill and intangible assets to MCHF 878.8 and property, plant and equipment to MCHF 538.8.

Operating capital, comprising net working capital, property, plant and equipment as well as goodwill and intangible assets, amounted to MCHF 1,548.5 (prior year MCHF 1,038.2) as of the end of 2004. The return on operating assets, expressed as the ratio of operating profit before amortization (EBITA) to average operating capital, amounted to 28.5% (prior year 23.2 %) in the year under review.