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GEA continues profitable growth in the first quarter of 2024 and confirms outlook for full year

GEA maintained its profitable growth trend in the first quarter of 2024. The company achieved organic revenue growth of 2.7 percent and a significant one-percentage-point increase in the EBITDA margin despite the persistently challenging market environment. 

“We are delighted to have started 2024 with very good results. That is remarkable considering the current market environment,” said CEO Stefan Klebert. “This performance reflects the strength of our business model. Plus, we have even achieved a new record by expanding our service share to 38 percent. We are confident overall for the months ahead and confirm our outlook for the current fiscal year.”

Further organic revenue growth; service business further expanded

As anticipated, order intake in the first three months of 2024 was down on the record figure in the prior-year quarter, declining by 13.6 percent to EUR 1,365 million (Q1 2023: EUR 1,580.7 million). In organic terms, the decrease was 9.7 percent. Negative currency translation effects amounted to EUR 62 million. While the Food & Healthcare division recorded slight growth on both an organic and a reported basis, order intake in the remaining divisions declined. Among customer industries, food and pharma showed growth, whereas almost all other customer industries sustained reductions in their order intake.

Revenue decreased slightly by 2.3 percent to EUR 1,241.2 million (Q1 2023: EUR 1,270.9 million). Adjusted for portfolio and currency translation effects, revenue rose by 2.7 percent. The negative currency translation effects here amounted to EUR 64 million. Contributing to the organic growth, the Separation & Flow Technologies, Farm Technologies and Heating & Refrigeration Technologies divisions recorded significant increases in some cases. The share of the particularly profitable service business expanded to 38.0 percent (Q1 2023: 36.6 percent).

Strong first-quarter earnings performance

EBITDA before restructuring expenses increased further and, at EUR 180.5 million (Q1 2023: EUR 171.8 million), was up 5.1 percent on the prior-year quarter. The corresponding margin improved from 13.5 percent to 14.5 percent. The Farm Technologies and Heating & Refrigeration Technologies divisions saw a significant improvement in EBITDA before restructuring expenses; Separation & Flow Technologies achieved a slight improvement. This contrasted with a decrease in the Liquid & Powder Technologies and the Food & Healthcare divisions.

Profit for the period went up by 10.9 percent in the first three months of 2024 to EUR 90.6 million (Q1 2023: EUR 81.7 million). Earnings per share increased correspondingly from EUR 0.47 to EUR 0.53. Earnings per share before restructuring expenses amounted to EUR 0.59, compared to EUR 0.54 in the prior-year quarter.

First tranche of the share buyback program is progressing well

Net liquidity, including lease liabilities, declined to EUR 218.0 million as of March 31, 2024, mainly due to the share buyback program (March 31, 2023: EUR 274.3 million). The total volume of shares acquired so far in the share buyback program from November 9, 2023 to March 31, 2024 amounts to approximately 3.1 million shares (total volume: EUR 111.3 million). Net working capital increased compared to the prior-year quarter to 8.6 percent of revenue (Q1 2023: 6.9 percent) and was thus within the target range of 8.0 to 10.0 percent.

Average capital employed in the last four quarters rose by EUR 112.9 million to EUR 1,812.2 million, mainly due to the increase in non-current assets and net working capital. As this was not matched by the increase in EBIT before restructuring expenses, return on capital employed (ROCE) fell slightly to what is still a high level of 32.3 percent (Q1 2023: 33.1 percent).

Outlook for 2024 fiscal year confirmed

GEA continues to expect organic revenue growth of 2.0 to 4.0 percent and an EBITDA margin before restructuring expenses of 14.5 to 14.8 percent in fiscal year 2024. With regard to ROCE, the company forecasts a figure of between 29.0 and 34.0 percent.

GEA shareholders approved the Climate Transition Plan 2040 by an overwhelming 98.4 percent

In a groundbreaking vote at the Annual General Meeting on April 30, 2024, the shareholders of GEA Group AG approved the company’s Climate Transition Plan 2040 with an overwhelming majority of 98.44 percent. This consultative vote makes GEA the first member of the DAX index family to obtain the approval of its shareholders for its path to net zero.

GEA to begin second tranche of the share buyback program in June 2024

The Executive Board of GEA Group AG has decided to begin the second and final tranche of the share buyback program immediately after the completion of the first tranche. After the first tranche with a volume of up to EUR 150 million will be completed this month, the second tranche of the share buyback program with a volume of up to EUR 250 million is expected to start at the beginning of June 2024 and should be completed by the beginning of 2025.

The share buyback program with a total volume of EUR 400 million started on 9 November 2023. 3.8 million shares worth EUR 135 million have been bought back so far. The shares acquired as part of the current share buyback program are to be subsequently canceled without reducing the share capital.


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