Georg Fischer : Grow with the smarter flow

We consider GF an attractive transformation and consolidation story in the structurally growing water equipment business. By the end of 2025, its more volatile and far less profitable machining + automotive-castings business should be gone and bring a higher-quality as well as greener business profile. The targeted gradual EBIT margin expansion of 360-560bp until 2030e (supportive operational leverage, remaining cost savings with Uponor around 70bp, improving product mix, more innovative solutions etc.) should not only become a supportive topic at the upcoming CMD in November but also help the expected further re-rating afterwards. We initiate with an Outperform rating and a target price of CHF 78.