Geberit Ag Business Information, Profile, and History

Company Perspectives:

All we do has to ultimately be of value to our customers. After all, it is they who determine whether we are successful.

History of Geberit Ag

Geberit AG is Europe's leading manufacturer of sanitary technology. The Jona, Switzerland-based company covers every aspect of sanitation systems and components, with products covering the entire range of building sanitation needs, from water supply to wastewater drainage. The company's products are developed along eight primary groups, divided into two major sectors. Under Sanitary Systems, which accounts for nearly 62 percent of Geberit's sales, the company's products include: Installation Systems; Flushing Systems, including water-saving technologies such as dual-volume and flush/stop systems; Public products and systems for public restroom facilities; Waste Fittings and Traps, for restrooms, bathrooms, and kitchens; Sanitary Products, including the company's "shower toilets," outfitted with bidet-like spray systems. Installation Systems represents the largest single Sanitary Systems market, with more than 37 percent of the company's total sales. Under the Piping Systems category Geberit includes: Building Drainage Systems, with complete piping and fittings assemblies for new construction and building renovations, which represents 20 percent of total group sales; Water Supply Systems; and Underground Piping Systems, which include products and systems for water and gas supply, sewage, drainage, and irrigation. Geberit operates in more than 70 countries worldwide, with eight manufacturing plants in Switzerland, Germany, the United States, Austria, Liechtenstein, Italy, Portugal, and China. Germany represents Geberit's single largest market, at 35.5 percent of sales in 2001. Italy, at 16.4 percent, and Switzerland, at 13 percent, are also major markets for the company, while the United Kingdom, Austria, the Benelux countries, and France account for nearly 24 percent of sales. Other markets, including North America, Asia, and the Middle East, added 11.5 percent to the company's sales of SFr 1.16 billion in 2001. In 2002, however, Geberit stepped up its presence in the United States, with the acquisition of The Chicago Faucet Company. Geberit's decentralized management structure typically places operational responsibility on the managers of its subsidiaries, which enables the company to remain reactive to local markets. Geberit also maintains a strong portfolio of brand names, including Hansgrohe, Balena, Geberit, Prosan, and others. Long a family-owned company, Geberit went public in 1999 on the Swiss Stock Exchange.

Sanitary Technology Pioneer at the Dawn of the 20th Century

Caspar Melchior Gebert started out as a plumber in Rapperswil, Switzerland, receiving a trade permit in 1874. Through the end of the century, Gebert built up his plumbing business. At the dawn of the 20th century, however, Gebert decided to enter manufacturing as well, and in 1905 began producing toilet tanks. Gebert's first tank, called the "Phoenix," was built of wood and lined with lead, and also featured a lead flush mechanism. The tank system represented somewhat of a breakthrough in the development of modern sanitary systems and the company was awarded a patent on the design in 1912. Gebert himself was not to live to see that event; upon his death in 1909, the company was taken over by his sons Albert and Leo.

By the end of that decade, Gebert had developed markets for the company's tanks across Switzerland, as well as throughout much of the region. Gebert set up a number of production workshops in order to supply these foreign markets. Production levels began to grow again as World War I drew to a close, prompting the company to build a new production plant in Rapperswil, in 1917. The new facility included the company's own foundry. The following year, the company added a new range of products, including u-bend pipes and taps and valves, which also were used by the chemicals industry.

In 1921, the company centralized all of its manufacturing activity into the single facility in Rapperswil. The company continued to develop its foreign markets, particularly in the German-speaking countries. By the end of the 1920s, however, the Gebert family extended the company's reach into France, with the opening of a sales office in Paris in 1929.

The company continued to develop its product lines and in the mid-1930s the company once again placed itself at the forefront of sanitary technology. The development of plastic was to take its place among the most significant events of the 20th century, transforming nearly every aspect of people's lives. In 1935, the Gebert family company became one of the first to begin adapting the new plastic material to its toilet tank and piping systems. The noncorroding nature of the new material made it ideally suited for use in producing certain components for toilet systems, particularly in the concealed systems being developed for public facilities.

World War II placed a halt on the company's growth. By the 1950s, however, with much of Europe undergoing a vast reconstruction and a corresponding economic boom, the company returned to its position as innovators in sanitary technology. In 1952, the company debuted its first all-plastic Geberit toilet tank. That product, produced with the newly developed polyethylene plastic, marked a new success for the company.

International Growth in the 1950s

The next generation of Geberts, brothers Heinrich and Klaus, took over management of the family-owned company in 1953. At that time, the company registered the Geberit trademark and adopted the slightly modified word as the new company name. Geberit then began to expand its European interests, creating a new international distribution subsidiary and opening new foreign offices offering sales and technical services.

Germany represented the market with the largest growth potential, particularly given the vast rebuilding effort needed in the postwar years. In order to position itself in the German market, Geberit created its first foreign subsidiary in 1955 in Pfullendorf, which constructed its own production plant and began developing a dedicated network of sales and technical service offices across Germany.

In addition to pursuing the foreign market, Geberit eyed an expansion of its product line. The flexibility of the new generation of plastics enabled the company to begin developing complementary product ranges, starting with Geberit's first drainage systems products, including u-bends and odor traps and related components, in 1956.

Geberit launched a new foreign subsidiary in France in 1959, which was followed by the establishment of a subsidiary in Vienna, Austria, in 1965. By then the company had moved to a larger plant in Rapperswil-Jona, constructed in 1962 to meet the growing demand. In 1964, the company marked a new successful product launch when it introduced its first concealed tank system that year.

Geberit's growth was particularly strong in Germany, and in 1967 the company built a new manufacturing facility for its Pfullendorf subsidiary. The company expanded its Jona plant and, in particular, added blow-molding production technology, reducing the cost of its toilet tank production. In 1972 Geberit added a third production plant, in Potterbrunn outside of Vienna. In that year, Geberit moved into a new market with the addition of a subsidiary in Belgium. A subsidiary was formed in The Netherlands in 1973.

During the 1970s, Geberit continued to add new product categories, extending its product range to include full drainage systems, flush-mounted systems, and introducing new components for the hygiene sector. The company remained wholly focused on Europe until the mid-1970s. In 1976, however, Geberit made its first attempt to enter the U.S. market, launching a subsidiary and production plant in Michigan City, Indiana, in 1976. The United States was to remain a relatively minor market for Geberit, however.

Sanitary Technology Leader in the New Century

A more significant event for the company came with its move into the installation systems market in 1977. That product market became the company's single largest, accounting for more than one-third of its sales at the dawn of the 21st century. At the same time, Geberit began developing a range of other products, such as the so-called "shower toilet," which featured a bidet-like spray attachment for standard and custom-built toilets.

The 1980s saw continued growth for the company. Geberit expanded its Pfullendorf plant again in 1980, while opening a warehouse facility at its Rapperswil-Jona site that same year. In 1984, Geberit moved into the Scandinavian market with the opening of a subsidiary in Denmark. A major step forward in the company's growing installation systems business came with the acquisition of Sanbloc GmbH, a producer of components for installation systems based in Weilheim, Germany.

The company automated its production process in 1987. In 1989, Geberit moved into new product territories, specifically with an entry into the fresh water supply systems sector, a move accomplished in part by the acquisition of a shareholding in FAE Fluid Air Energy, which gave the company the exclusive license for marketing FAE's products.

The company built a new, larger factory in Potterbrunn, which opened in 1990. Another production plant, placed under the company's Pretec subsidiary, was added in Liechtenstein in 1994, in order to take advantage of the newly opening markets in the eastern region of the reunified Germany as well as other Eastern European markets. By then, the company had begun to prepare its transition to a public company. In 1991, the company hired its first CEO from outside the Gebert family. Under Gunter F. Kelm, the company redeveloped its management structure, adopting a decentralized structure that gave its subsidiary greater operation control and responsibility. By 1992, the company's sales had topped SFr 785 million--a near-doubling of the company's revenues in just four years.

Geberit continued to invest heavily, at an average rate of some SFr 80 million per year. The company opened a new production plant in its Rapperswil-Jona headquarters, and then constructed a plant for its Mepla product range in Givisiez, Switzerland. At the same time, Geberit acquired additional production capacity in Italy and Portugal. In 1994, Geberit launched a new subsidiary, Balena, as the brand for its line of toilet-showers. The company successfully developed the brand and its product line, topping 100,000 customers by the end of the decade.

In the mid-1990s, Geberit began investigating its options for the future, and in 1995 the company announced that it was considering a public offering to enable the founding family to cash out of the business. Instead, Geberit was sold to British investment house Doughty Handson, manager of the largest private equity investment fund in Europe, in 1995. Gunter Kelm and the rest of Geberit's management team remained in place, acquiring a minority share in the company, which projected a public offering for later in the decade.

With stronger financial backing, Geberit began a series of acquisitions, such as that of Italian PVC-pipe manufacturer Deriplast, acquired in 1995. The following year the company, through Deriplast, acquired another Italian company, Walking Pipe Italiana. In 1996, also, Geberit acquired Buchler Werkzeugbau AG, of Germany. Then, at the beginning of 1999, the company moved into the United Kingdom with the purchase of Caradon Terrain Ltd., a maker of drainage systems and other products under the Terrain brand name. Not all of the company's expansion moves came through acquisition, however; in 1998, the company prepared its drive into the Asian markets with the opening of a production plant in China.

By the end of 1998, with sales topping SFr 1 billion for the first time, Doughty Hanson announced its intention to launch Geberit--now named Geberit AG--as a public company in 1999. That listing was accomplished in June 1999.

The successful initial public offering gave Geberit the funds to pursue new acquisitions. In July 1999, the company acquired a further stake in FAE Fluid Air Energy, raising its shareholding position to 70 percent, with an agreement to take full control of FAE by 2001.

Geberit was hit hard by a slumping German building sector in 2001, which saw the company's sales drop slightly. Yet Geberit hit back the following year with two key acquisitions. The first, made on January 1, 2002, gave the company a controlling stake of Austria's Firma Huter Vorfertigung GmbH, a company established in the 1970s specializing in installation systems. Then, in July 2002, Geberit strengthened its position in the North American market with the acquisition of The Chicago Faucet Company. The purchase of that company extended Geberit's product range to include commercial faucets and fittings, as well as four new production plants in the United States. Long established as a European sanitary technologies leader, Geberit prepared to extend its leadership to a global level in the new century.

Principal Subsidiaries: Afluxo S.A.; Balena DoucheWC AG; Buechler Werkzeugbau AG; Deriplast S.p.a; FAE Fluid Air Energy SA; Geberit B.V.; Geberit Beteilgungs GmbH & Co. KG; Geberit Deutschland GmbH & Co.; Geberit Finance Ltd. (Channel Islands); Geberit Flushing Technology Co. Ltd.; Geberit GmbH & Co. KG; Geberit Holding AG; Geberit Holding B.V.; Geberit International AG; Geberit Ltd.; Geberit Management GmbH; Geberit Manufacturing Inc.; Geberit Marketing e Distribuzion SA; Geberit N.V.; Geberit Plumbing Technology Co. Ltd.; Geberit Produktions AG; Geberit Produktions GmbH; Geberit S.A.; Geberit S.a.r.l.; Geberit South East Asia Pte. Ltd.; Geberit Sp.z.o.o.; Geberit Technik, AG; Geberit UK Ltd.; Geberit Vertriebs AG; Geberit Verwaltungs AG; Geberit kft; Geberit spol s.r.o.; Geberit spol.s.r.o.; Gemax Gebaeudetechnik GmbH; Gerberit A/S; Gerberit Vetriebs GmbH; Hansgrohe Geberit S.A.S.; Mutra Investments B.V.; Plastek S.r.l.; Pretec Sanitaertechnik Produktions GmbH; Prosan GmbH; Prosan d.o.o.; Sanbloc GmbH; Sanplas Handels GmbH.

Principal Competitors: Tostem Inax Holding Corp; TOTO Ltd.; Kohler Co.; Air Water Inc; Takara Standard Co Ltd.; Eagle Industries Inc.; Uralita SA; USI Plumbing Products; Villeroy und Boch AG; Cleanup Corp.; Sanitec Corp.; Compania Roca Radiadores SA; Keramik Holding AG; Elkay Manufacturing Co.; E I D Parry India Ltd.; Coop Costruttori Scarl; Homeform Group Manchester; Ideal Standard SpA.

Chronology

• Key Dates:
• 1874: Caspar Gebert opens a plumbing shop in Rapperswil, Switzerland.
• 1905: Gebert develops a wooden toilet tank, the Phoenix, which is patented in 1912.
• 1935: Gebert begins developing components using plastics, one of the first in the market to adopt the new material.
• 1952: Company debuts the first all-plastic toilet tank.
• 1953: Company adopts the name and trademark of Geberit.
• 1955: Company launches its first foreign subsidiary and product facility in Pfullendorf, Germany.
• 1956: Company begins producing components for wastewater systems.
• 1959: Company establishes a subsidiary in France.
• 1964: Company launches the first concealed toilet tank.
• 1965: Company forms a subsidiary in Austria.
• 1972: Company starts up a subsidiary in Belgium.
• 1973: A subsidiary is formed in The Netherlands.
• 1977: Company enters the installation systems market.
• 1985: Company acquires Sanbloc GmbH, a manufacturer of components for installation systems based in Germany.
• 1991: The Gebert family retires from active management and the first nonfamily member, Gunter Kelms, is named CEO.
• 1997: Geberit is acquired by investment firm Doughty Hanson.
• 1999: Geberit goes public on the Swiss stock exchange; the company acquires Caradon Terrain in England and 70 percent of FAE Fluid Air Systems.
• 2002: The company acquires a controlling stake in Huter Vorfertigung GmbH, based in Austria; the company acquires The Chicago Faucet Company, based in the United States.